🧾 Debt Consolidation Calculator
Compare your debts with a consolidation loan — monthly payment, payoff time, total interest and origination fee — to see if it really saves money.
Your current debts
Consolidation loan offer
| Keep current debts | Consolidation loan | |
|---|---|---|
| Amount | $12,000 at avg. 24.82% | $12,632 at 12% |
| Monthly payment | $370 | $420 |
| Time to pay off | 4 yr 10 mo | 3 yr |
| Total interest | $8,134 | $2,472 |
| Origination fee | — | $632 |
| Total cost of borrowing | $8,134 | $3,104 |
The loan payment is higher than what you pay now — the shorter term is doing the saving. A longer term lowers the payment but adds interest.
Consolidation only helps if the old balances stay paid off. Running the cards back up while repaying the loan leaves you with more debt than you started with.
What Debt Consolidation Calculator Does
This debt consolidation calculator compares keeping your current debts with replacing them by one consolidation loan. Each existing debt is simulated month by month at its own APR and payment, so the comparison reflects your real payoff date and interest — not a blended estimate. The loan side uses your offer’s APR and term, and adds the origination fee the way lenders usually charge it: taken out of the loan, so you must borrow a little more to clear the same balances.
The result shows the monthly payment, time to debt-free, total interest and fees for both options, and the difference. A lower rate is not the whole story: a much longer term can cost more overall even at a lower APR, and the calculator makes that visible.
How to Use Debt Consolidation Calculator
- List each debt with its balance, APR and current monthly payment
- Enter the consolidation loan’s APR, term and origination fee
- Compare monthly payments and time to pay off
- Compare total interest and fees for both options
- Adjust the term to find the best balance of payment and cost
Formula Used by Debt Consolidation Calculator
Loan amount with a fee deducted from proceeds
Loan = balances to pay off ÷ (1 − fee %)
Worked example
$12,000 of debt and a 5% origination fee.
- $12,000 ÷ 0.95 = $12,631.58
- Fee = $631.58
Result: Borrow about $12,632 so $12,000 reaches your creditors.
Loan payment
Payment = P × r ÷ (1 − (1 + r)⁻ⁿ), with r = APR ÷ 12 and n = months
Worked example
$12,632 at 12% for 36 months.
- r = 0.01
- 12,632 × 0.01 ÷ (1 − 1.01⁻³⁶)
Result: About $420 a month.
What Makes Consolidation Worth It
| Factor | Helps | Hurts |
|---|---|---|
| New APR | Well below your current rates | Close to or above them |
| Term | Similar to or shorter than your current payoff time | Much longer |
| Fees | None or small | Large origination fee |
| Behavior | Old cards stay paid off | Balances run back up |
How to Read Your Result
Payment vs total cost
Lenders often advertise the lower monthly payment. That can be real relief for a tight budget, but compare total cost too. If the loan saves money only because it is shorter, you could get the same effect by raising your current payments — the consolidation loan just fixes the higher payment in place.
Alternatives
A 0% balance-transfer card can beat a loan if you can clear the balance before the promotional period ends (watch the transfer fee). The avalanche method — extra money to the highest-rate debt first — costs the least interest without a new loan. Nonprofit credit counseling agencies can arrange debt management plans with reduced rates.
Limitations & Accuracy Notes
- Assumes fixed APRs and payments; variable rates and changes in spending are not modeled.
- Credit score effects and approval odds are not estimated.
- A comparison tool, not financial advice.