💰 Financial
Debt Consolidation Calculator
See if consolidating your multiple high-interest debts into a single, lower-interest loan will save you money and lower your monthly payment.
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Formula
Savings = (Old Payment × Old Term) - (New Payment × New Term)Old Total Interest- Sum of interest for all current debts
New Total Interest- Interest on the consolidation loan
Example
Consolidating Three Credit Cards
You have three cards totaling $15,000 at an average 22% APR, paying $450/month.
- Calculate current path: Paying $450/month at 22% takes 51 months and costs $7,688 in interest.
- Consider a consolidation loan: $15,000 at 12% for 48 months.
- Calculate new path: New payment is $395/month. Total interest is $3,960.
- Result: You save $55 a month AND save $3,728 in total interest.
Frequently Asked Questions
It is a great idea if you get a lower interest rate AND if you change the spending habits that caused the debt in the first place. If you consolidate but then run up your credit cards again, you will be in worse trouble.
There may be a small, temporary dip due to a hard inquiry when you apply for the new loan. However, replacing maxed-out credit cards with an installment loan usually improves your score quickly.