Debt Consolidation Calculator
Debt consolidation combines multiple debts into one loan with a single monthly payment. It saves money when the new rate is lower than your current weighted average rate — this calculator shows exactly whether it does.
Enter up to 4 current debts and a consolidation loan offer to see your monthly savings, total interest comparison, and whether consolidation is worth it.
When Does Debt Consolidation Make Sense?
Debt consolidation is a tool, not a solution. It makes financial sense only when three conditions are met: your new rate is lower than your current weighted average rate, the total interest paid over the life of the consolidation loan is less than what you'd pay keeping current debts, and you don't accumulate new debt on the accounts you just paid off. Miss any of those three, and consolidation becomes expensive debt shuffling.
The Weighted Average Rate: What You're Really Paying
If you have a $10,000 credit card at 22% and a $5,000 card at 18%, your weighted average rate is: (10,000×22 + 5,000×18) / 15,000 = 20.67%. Any consolidation loan with a rate below 20.67% reduces total interest cost. A rate above it makes things worse. This calculator computes your weighted average rate automatically and compares it to the consolidation loan rate — so you know immediately whether the offer is a good deal.
| Scenario | Rate | Monthly | Total Interest | Verdict |
|---|---|---|---|---|
| Keep current debts (min pmts) | 20.7% avg | $325 | $7,820 | Baseline |
| Consolidate @ 12%, 3 yr | 12% | $432 | $2,552 | Save $5,268 ✓ |
| Consolidate @ 12%, 5 yr | 12% | $289 | $4,337 | Save $3,483 ✓ |
| Consolidate @ 22%, 5 yr | 22% | $358 | $8,467 | Cost $647 more ✗ |
The Trap: Longer Terms Cost More Total Interest
A common consolidation mistake is taking a lower rate but stretching the repayment to 7–10 years. Even at 10% instead of 20%, a 10-year payoff on $15,000 of debt costs more total interest than paying the same debt off aggressively in 3 years at 20%. This calculator shows total interest for both scenarios — not just the monthly payment — so you can make an informed decision rather than chasing the lower monthly number.
Types of Debt Consolidation Loans
Three main vehicles: Personal loans are unsecured, available at 7%–20% for well-qualified borrowers, 3–7 year terms. Best for credit card debt consolidation. Balance transfer cards offer 0% APR for 12–21 months with a 3%–5% transfer fee. Ideal if you can pay off the full balance during the intro period. Home equity loans/HELOCs offer the lowest rates (currently 7%–9%) but use your home as collateral — missing payments risks foreclosure. Best for larger amounts ($20,000+) if you have significant home equity.
If you want to compare debt payoff strategies without consolidating, the Debt Payoff Calculator shows avalanche vs. snowball side-by-side. For student loan consolidation specifically, the Student Loan Calculator handles federal loan scenarios and extra payment impacts. For deeper context on when consolidation is the right call, read our guide on debt consolidation.
Frequently Asked Questions
What is debt consolidation?
Debt consolidation combines multiple debts — credit cards, personal loans, medical bills — into one new loan with a single monthly payment. It makes financial sense when the new loan's interest rate is lower than the weighted average rate of the debts you're consolidating, and when the total interest paid over the loan's life is less than what you'd pay otherwise.
When does debt consolidation make sense?
Consolidation makes sense when: (1) the new rate is lower than your current weighted average rate, (2) total interest paid is less than keeping current debts, and (3) you won't accumulate new debt afterward. It doesn't help if you extend the term so long that you pay more total interest, or if you run the paid-off cards back up.
Does debt consolidation hurt your credit?
Applying causes a small temporary hard inquiry (typically 5–10 points). If consolidation reduces credit card utilization (because card balances drop to zero), your score often improves within 3–6 months. The net effect is usually positive if you use the consolidation responsibly.
What is the difference between debt consolidation and debt settlement?
Consolidation rolls all debts into one new loan you repay in full — it doesn't reduce principal. Settlement negotiates to pay less than the full balance, severely damages your credit score, and may create a taxable income event. Settlement is a last resort; consolidation is a legitimate financial strategy when the math works.
Can I consolidate student loans with other debts?
Private student loans can be consolidated with other debts via a personal loan, but federal student loans should not be rolled into a private loan — doing so eliminates income-driven repayment options, PSLF eligibility, and other federal protections. Federal-to-federal consolidation (via the Direct Consolidation Loan) is available separately and averages your existing federal loan rates.
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