🔄 Debt Consolidation Calculator
Calculate if consolidating debt saves money
Weighted average of all debts
How to Use This Calculator
Enter Total Debt Amount
Input the total amount of debt you want to consolidate - the sum of all debts you're considering consolidating.
Enter Average Current Interest Rate
Enter the weighted average interest rate across all your current debts. Calculate this by weighting each debt's rate by its balance.
Enter Consolidation Loan Details
Enter the interest rate and term for the consolidation loan you're considering. This will be compared to your current debt situation.
Review Consolidation Analysis
See if consolidation saves money by comparing current payments and total costs to the consolidation loan. The calculator shows monthly savings and total savings.
Formula
Monthly Payment = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ - 1]
Total Savings = Current Total - Consolidation Total
Where:
• P = Principal (Total Debt)
• r = Monthly interest rate
• n = Number of monthly payments
Example Calculation:
If total debt $50,000, current rate 18%, consolidation rate 12%, term 5 years:
• Current payment: ~$1,269/month
• Consolidation payment: ~$1,112/month
• Monthly savings: $157/month
• Total savings: $9,420 over 5 years
About Debt Consolidation Calculator
A debt consolidation calculator helps you determine if consolidating multiple debts into a single loan saves money. Debt consolidation involves taking out one new loan to pay off multiple existing debts, typically to get a lower interest rate, simplify payments, or reduce monthly payments. This calculator compares your current debt situation (total debt, average interest rate, current payments) to a consolidation loan (new rate, new term), showing you potential savings and whether consolidation makes financial sense.
When to Use This Calculator
- Consolidation Evaluation: Evaluate if consolidating debt saves money
- Loan Comparison: Compare current debts vs. consolidation loan
- Payment Planning: See new monthly payment amount
- Savings Analysis: Understand total savings from consolidation
When Consolidation Makes Sense
- Lower Interest Rate: Can get a significantly lower rate than current average
- Simplified Payments: One payment instead of multiple
- Better Terms: More favorable loan terms
- Savings: Total cost (interest + fees) is less than current debts
Why Use Our Calculator?
- ✅ Savings Calculation: See exact savings from consolidation
- ✅ Payment Comparison: Compare current vs. consolidation payments
- ✅ Decision Support: Make informed consolidation decisions
- ✅ Cost Analysis: Understand total costs and savings
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
When does debt consolidation make sense?
Debt consolidation makes sense when you can get a lower interest rate than your current average rate, saving money overall. It also simplifies payments (one payment instead of multiple) and can reduce monthly payments (though this may extend the loan term). Always compare total costs, including fees.
What are the costs of debt consolidation?
Consolidation costs may include: origination fees, balance transfer fees, closing costs, and potentially higher total interest if the loan term is extended. Always calculate total costs (including fees) to ensure consolidation actually saves money.
Will consolidation lower my monthly payment?
Consolidation may lower monthly payments, especially if you extend the loan term. However, a lower payment doesn't always mean you're saving money - you might pay more interest over time. Focus on total cost, not just monthly payment.
What are alternatives to debt consolidation?
Alternatives include: balance transfer to 0% APR card, home equity loan/HELOC, debt snowball/avalanche methods, credit counseling, debt management plans, or simply paying down debts aggressively without consolidating.