Debt Consolidation Calculator
Your debts & new loan
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- United States card and lending practice
- Scope and limitations
- Educational estimate only. Your issuer sets the minimum-payment formula, how a payment is allocated across balances, when interest is charged, and any fees or promotional terms — check your cardholder agreement for the figures that bind.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the total you owe across the debts you would consolidate.
- 02
Enter your current average rate — the weighted average across those debts, which the Debt Avalanche Calculator reports if you do not know it.
- 03
Enter the rate and term of the consolidation loan you have been offered.
- 04
Enter the origination fee. Most U.S. consolidation loans charge 1% to 8% up front and finance it, which is often the difference between a good offer and a bad one.
- 05
Read the monthly saving, the total saved, and the before-and-after table — both rows run over the same term, so the comparison is like for like.
Formula
Consolidation replaces several debts with one fixed-rate loan. The tool compares what you pay now against what the new loan costs, over the same term, so the comparison is like for like — a lower payment bought by stretching the term is not a saving, and holding the term constant is what keeps that out of the figures. Monthly payment on either side is the standard amortising payment: P x i / (1 - (1 + i)^-n), where i is the annual rate divided by 12 and n is the number of months. The origination fee most U.S. lenders charge is deducted from the loan proceeds, so to clear a given amount of debt you must borrow more than that amount: amount financed = debt / (1 - fee percentage). You then pay interest on the fee for the whole term. Total paid is the payment times the term; total interest is total paid minus the amount financed.
Example
Inputs: $25,000 of card debt at a blended 18%, a consolidation loan at 10% over 3 years, and a 5% origination fee. Step 1 — Size the loan. The fee comes out of the proceeds, so borrowing exactly $25,000 would leave you short. You need $25,000 / (1 - 0.05) = $26,315.79, of which $1,315.79 is the fee and $25,000 reaches your creditors. Step 2 — Price the new loan. n = 3 x 12 = 36 months and i = 10% / 12 = 0.8333% a month, giving a payment of about $849 a month. Step 3 — Price staying put. The same $25,000 at 18% over the same 36 months costs about $904 a month. Step 4 — Compare. $904 - $849 = about $55 a month, and over 36 months about $1,968 less in total. Read it carefully. The saving is real only because both rows run over the same 36 months. Stretch the new loan to five years and the payment drops below $600, which feels better and costs more — the tool holds the term steady so that effect cannot hide. And the whole comparison depends on the blended rate you entered: if your real mix is closer to 14% than 18%, a 10% loan with a 5% fee may save nothing at all.
Definitions
- Debt consolidation
- Replacing several debts with a single loan, ideally at a lower rate and always with one payment and one end date.
- Origination fee
- A one-off charge for making the loan, commonly 1% to 8%. Usually financed, so it accrues interest for the whole term.
- Weighted average APR
- Your blended rate across the debts being consolidated, weighted by balance. The benchmark the new loan must beat.
- Term
- How long the new loan runs. A longer term lowers the payment and raises the total interest.
- Amortization
- A fixed payment split between interest and principal, with the principal share growing each month until the balance clears.
- Unsecured loan
- A loan backed by nothing but your promise to repay. Costs more than secured borrowing but puts no asset at risk.
- Secured loan
- A loan backed by an asset — a home or a car — which the lender can take on default. Cheaper, and far riskier for the borrower.
- Credit mix
- The variety of account types on your report. Adding an installment loan alongside revolving cards can modestly help a score.
- Hard inquiry
- The credit check an application triggers, costing a few points for several months.
- Prepayment penalty
- A charge for paying a loan off early. Rare on U.S. personal loans, and worth confirming before signing.
- Debt settlement
- Negotiating to repay less than owed. Distinct from consolidation, damaging to credit, and potentially taxable.
- Total paid
- Payment times term — everything that leaves your account. The only figure that compares two offers honestly.
Good to know
What debt consolidation actually does
Debt consolidation takes several separate debts and replaces them with one new loan. Instead of juggling a card balance here, a personal loan there, and a store account somewhere else, you borrow a single sum large enough to clear all of them at once, then repay that one loan on a single schedule. The old accounts are paid to zero and the new loan stands in their place. The defining feature is consolidation into one fixed-rate balance: many obligations collapse into a single principal, a single interest rate, and a single monthly payment for a chosen term. This calculator models exactly that move. It treats your combined debts as one total principal, applies the rate you are paying now across all of them, and compares that against the same principal repaid at a new consolidation rate over the same number of years. Nothing about the size of the debt changes when you consolidate; what changes is the rate it carries and the structure of how you pay it back. That is why the tool keeps the principal and the term identical between the two scenarios and varies only the interest rate. The result isolates the one thing a consolidation loan is really offering you: a different rate on the same debt. If the new rate is meaningfully lower than the blended rate you pay today, the monthly payment falls and the total interest over the life of the loan drops. If it is not, consolidation may simplify your bills without saving money, which is a distinction this tool is built to make visible before you commit.
Understanding your blended current rate
The single most important input to get right is the current average rate, because the whole comparison hinges on it. When you owe several debts at different interest rates, no one rate describes what your debt costs as a whole. What matters is the blended rate, sometimes called the weighted-average rate, which is the single rate your combined balances effectively carry. You compute it by multiplying each balance by its own rate, adding those products together, and dividing by your total debt. Suppose you owe 250,000 on a card at 22%, 150,000 on a personal loan at 14%, and 100,000 on a store account at 9%. Multiply and sum: 250,000 times 22 is 5,500,000, 150,000 times 14 is 2,100,000, and 100,000 times 9 is 900,000, which total 8,500,000, and dividing by the 500,000 total yields a blended rate of 17%. That blended figure, not the highest or the lowest individual rate, is what you should enter as the current average rate. Using a simple average of the rates instead would distort the result, because it ignores how much you owe at each rate; a punishing rate on a small balance matters far less than a moderate rate on a large one. Getting this number right is what makes the comparison honest. Enter too high a blended rate and consolidation will look better than it is; enter too low a rate and you may dismiss a loan that would genuinely help. Take the few minutes to weight each rate by its balance before you run the numbers.
How the comparison engine works
Under the hood the tool runs the same amortization formula twice. Amortization is the process of repaying a fixed loan in equal monthly installments, where each payment covers that month's interest and chips away at the principal until the balance reaches zero exactly at the end of the term. The level payment is found with a standard formula: with a monthly rate i equal to the annual rate divided by 100 and then by 12, and a term of n months, the payment equals the principal times i, divided by one minus the quantity one plus i raised to the power of negative n. The engine plugs your total debt into this formula first at the current blended rate, producing the payment you are effectively making now, and then again at the new consolidation rate over the same term, producing the new payment. For each scenario it also computes the total interest, which is simply the monthly payment multiplied by the number of months, minus the original principal, since everything you pay above the amount borrowed is interest. The monthly saving is the current payment minus the new payment. The interest saved is the current total interest minus the new total interest. Because the principal and the term are held identical across both runs and only the rate changes, the two outputs differ for exactly one reason: the rate. This is what makes the result a clean blended-rate-versus-new-rate comparison rather than a tangle of moving parts. It is worth knowing that the engine deliberately excludes origination fees and any other costs; those are real and are covered separately, but they are not part of this rate-only calculation.
The simplicity of one payment and one due date
Beyond the interest arithmetic, consolidation changes the administrative shape of your debt, and that change has real value even though it never appears as a number on the results panel. Carrying several debts means several statements, several due dates, several minimum payments, and several chances each month to miss one. A single missed or late payment can trigger fees, penalty interest, and a mark on your credit file, and the more separate accounts you manage, the higher the odds that one slips through in a busy month. Rolling everything into one loan reduces that surface area to a single payment on a single date. There is one amount to budget for, one statement to read, and one autopay to set up, which makes a late payment far less likely and your monthly cash flow far easier to plan. This administrative simplicity is the second reason people consolidate, alongside a lower rate, and for some it is the larger motive. Predictability matters too: a consolidation loan is typically a fixed-rate, fixed-term installment loan, so the payment is the same every month and the debt has a definite end date you can see from the outset. That stands in contrast to revolving credit, where the minimum payment drifts as the balance changes and the payoff date can stretch indefinitely. The behavioral benefit of knowing precisely when you will be debt free, and of having only one obligation to stay on top of, can be the difference between a plan you follow and one you lose track of. Weigh this simplicity alongside the monetary saving, not instead of it.
How origination fees erode the saving
The monthly saving and interest saved that the tool reports are based on rates alone, but a real consolidation loan often carries an origination fee, and that fee can meaningfully change whether the move pays off. An origination fee is an up-front charge for issuing the loan, usually quoted as a percentage of the amount borrowed, and it is commonly either deducted from the funds you receive or added to the balance you repay. On a 500,000 consolidation loan, a 3% origination fee is 15,000, a sum that comes directly out of whatever interest the new rate saves you. The honest way to judge a consolidation offer is therefore to take the interest saved figure this tool produces and subtract the origination fee to get your true net benefit. If the calculator shows you saving 70,000 in interest and the fee is 15,000, your real saving is closer to 55,000, still worthwhile but smaller than the headline suggests. The fee also reframes break-even thinking: a loan that saves only a little interest can be wiped out entirely by its fee, turning an apparent win into a wash or even a loss. This is why two offers at the same rate are not equal if one charges a higher fee. When you compare consolidation loans, always look past the advertised rate to the total cost including the origination fee and any other charges. Use this tool to find the interest the rate saves, then deduct the fee yourself; the loan is only worth taking if a clear net benefit remains after that subtraction. The engine leaves the fee out precisely so you can see the pure rate effect and apply your own fee on top.
Secured versus unsecured consolidation
Consolidation loans come in two broad forms, and the difference between them is not just the rate but the risk. An unsecured consolidation loan, typically a personal loan, is backed by nothing but your promise to repay; the lender prices the higher risk into a higher interest rate, but your assets are not directly on the line if you fall behind. A secured consolidation loan is backed by collateral, most often home equity, which lowers the rate the lender offers because their risk is reduced. The lower rate of a secured loan can make consolidation look far more attractive on this calculator, since a smaller new rate widens both the monthly saving and the interest saved. But that lower rate is bought with a serious trade-off that the numbers do not show: by securing the loan against your home or another asset, you convert debt that was unsecured into debt that can cost you the asset if you cannot pay. Credit card and personal loan balances, however expensive, do not put your house at risk; a home-equity consolidation does. This matters most when consolidating unsecured debt into a secured loan, because you are not merely changing the rate, you are changing what happens in a worst-case scenario. There is also a term effect: secured loans often run much longer, which can lower the monthly payment while quietly increasing total interest. The lower rate is genuine and the saving can be real, but weigh it against the collateral you are pledging. Use the rate comparison to size the financial benefit, then decide separately whether the risk of attaching that debt to an asset is one you are willing to accept.
The credit-score angle of consolidating
Consolidation interacts with your credit profile in several ways, some helpful and some to watch. Applying for the new loan usually triggers a hard inquiry, a formal check that can shave a few points off your score temporarily; this effect is small and fades within months. Opening a new account also lowers the average age of your credit history, another minor and temporary drag. Working the other way, and often more powerfully, is the effect on credit utilization. Utilization is the share of your available revolving credit that you are using, and it is a major component of most scoring models. When a consolidation loan pays your credit cards down to zero, your revolving utilization can drop sharply, which often lifts your score, sometimes substantially, because a personal or installment loan does not count toward revolving utilization the way card balances do. Consolidation can therefore improve your score on net even as the inquiry and the new account nudge it down briefly. There is a common mistake that undoes this benefit: closing the old cards once they are paid off. Closing accounts removes their credit limits from your available total, which can push utilization back up and also cuts the average age of your accounts, so the very action that feels responsible can hurt your score. In most cases the better move is to keep the paid-off cards open and unused, preserving the available limit and the account history while resisting the temptation to run them up again. Understand these moving parts before you consolidate so the credit-score outcome is one you have planned for rather than one that surprises you.
Term length as a lever
The term you choose, set here by the new loan term in years, is a powerful lever that pulls the monthly payment and the total interest in opposite directions, and understanding the trade-off is essential to reading the result honestly. Stretching the same principal over more years spreads it across more payments, so each monthly payment is smaller. That lower payment is the headline appeal of a longer term and it eases monthly cash flow. But a longer term also means the balance is outstanding for longer, accruing interest over more months, so the total interest you pay over the life of the loan rises even though the rate is unchanged. A shorter term does the reverse: the monthly payment is higher because the principal is compressed into fewer payments, but you pay less total interest because the debt clears faster. This creates a genuine tension when you consolidate. It is possible to take a consolidation loan at a lower rate and still pay more total interest than before, if you simultaneously stretch the term far longer than your old debts would have run. The monthly saving can look impressive while the interest saved shrinks or even turns negative. Because this tool holds the term identical across the current and new scenarios, the comparison it shows isolates the rate effect cleanly. But when you take a real offer, check the term you are being given against the effective term of your existing debts. The right way to use the lever is to choose the shortest term whose monthly payment you can comfortably sustain, capturing the lower rate without giving back its benefit through years of extra interest. Run different term values through the tool to see how the monthly payment and the total interest move against each other.
When consolidation does not help
Consolidation is a tool, not a cure, and there are clear situations where it fails to deliver and this calculator is meant to expose them before you commit. The first is when the new rate is not low enough. If the consolidation rate you qualify for is close to or above your blended current rate, the monthly saving will be small or negative and the interest saved will not justify the effort; the tool will show this directly when the two rates are similar. The second is when fees swallow the benefit. As covered above, an origination fee subtracts from the interest the rate saves, so a thin rate advantage can be erased entirely once the fee is counted, leaving you no better off or worse. Always net the fee against the interest saved before deciding. The third, and most common cause of failure, is behavioral rather than mathematical: running the old balances back up. Consolidation pays your credit cards to zero, which leaves them with full available credit and a powerful temptation. If you charge those cards up again while still repaying the consolidation loan, you now carry both the new loan and fresh card debt, a worse position than where you started. The loan only helps if the cleared accounts stay cleared. A fourth case is stretching the term so far that a lower rate still produces more total interest, as the term-length discussion explains. None of these mean consolidation is a bad idea in general; they mean it is the wrong move in specific circumstances. Use the tool to test the rate and fee math, and be honest with yourself about the behavior, before treating a consolidation loan as the answer.
Reading the results panel
The calculator distills the consolidation decision into a few figures, and knowing what each one means keeps you from drawing the wrong conclusion. The headline is the monthly saving, the difference between the payment you effectively make now at your blended rate and the payment on the new loan at the consolidation rate over the same term. A positive figure means the new loan costs less each month; a negative one means it costs more, which can happen if the new rate is higher or the term is set in a way that raises the payment. Below it sits the new payment, the actual fixed monthly amount you would owe on the consolidation loan, which is the number to test against your budget. The interest saved compares the total interest of the two scenarios, where each total is the monthly payment times the number of months minus the original principal; it is the lifetime money difference and is usually the more meaningful figure than the monthly saving, because it captures the whole cost of the debt rather than a single month. The new total interest shows what the consolidation loan will cost in interest over its full term, useful for sanity-checking against your old debts and for spotting a case where a lower rate over a longer term still piles up interest. Read these together rather than in isolation. A large monthly saving paired with a modest interest saved is a sign the term has been stretched. And remember the consistent caveat: every figure here reflects rates only, so subtract any origination fee from the interest saved to find your true net benefit before deciding whether to consolidate.
Frequently asked questions
When is consolidating actually worth it?
When the new rate, including the origination fee, beats your weighted average rate — and when you stop using the cards you just cleared. A lower payment achieved by stretching the term is not a saving.
What is an origination fee?
A one-off charge for making the loan, commonly 1% to 8% of the amount. It is normally deducted from the proceeds or added to the balance, which means you borrow it and pay interest on it for the whole term.
Does consolidating hurt my credit score?
Short term, slightly: a hard inquiry and a new account lower your average age. Medium term it usually helps, because paying off revolving balances drops your utilization sharply and an installment loan improves your credit mix.
Why does a longer term lower my payment but cost more?
Because interest accrues for longer on a balance that falls more slowly. Both rows here use the same term precisely so that this effect cannot hide inside the comparison — change the term and you will see it.
Is a consolidation loan the same as debt settlement?
No, and the difference matters. Consolidation repays everything you owe at a new rate. Settlement negotiates to pay less than you owe, which damages your credit for years and can create taxable forgiven income.
What credit score do I need?
Rates good enough to be worth taking generally start in the mid-600s and improve sharply above 720. Below that, the offered rate often exceeds a card's, and consolidating would cost more than staying put.
Should I consolidate with a home equity loan?
It carries the lowest rate, and the largest risk: it converts unsecured debt into debt secured by your home. A card default damages your credit; a home equity default can cost the house.
Can I consolidate federal student loans this way?
You can, but you generally should not. Refinancing federal loans with a private lender permanently forfeits income-driven repayment, deferment options and forgiveness programs — protections no rate cut compensates for.
What is my weighted average rate?
Each debt's rate weighted by its balance, not a plain average. A large balance at 24% and a small one at 6% blend closer to 24% than to 15% — and that blend is the number the new loan must beat.
What happens if I keep using the cards?
The common failure. The loan clears the cards, the cards refill, and the borrower owes both. If the accounts are a temptation, freeze or close the highest-risk ones as part of the plan.
Are there prepayment penalties?
Most reputable U.S. personal-loan lenders charge none, which means extra payments shorten the loan. Confirm before signing, because a prepayment penalty removes your ability to accelerate.
Is a 0% balance transfer better?
For a balance you can clear inside the promo window, usually yes — a 3% fee beats any interest rate. For a larger balance needing years, a fixed-rate loan with a defined end date is generally the sounder structure.