Debt Consolidation Calculator
Should you consolidate your debts into one loan? Enter your current debts, set the new loan terms, and get a clear side-by-side comparison of monthly savings, total interest, and break-even on any fees.
Enter up to 5 debts. Leave rows blank to skip. Minimum payment should cover at least the monthly interest charge.
Try a scenario
How to Use This Calculator
Tab "Current Debts"
Enter up to 5 debts. For each debt, provide a name (optional), balance, annual interest rate, and minimum monthly payment. The calculator shows your total monthly outgoings, weighted average interest rate, estimated total interest at minimum payments, and longest individual payoff timeline.
Tab "Consolidated"
The total balance from Tab 1 is carried over automatically. Enter the new consolidation rate, loan term, and an optional origination fee percentage. The result shows your new single monthly payment and total interest cost including fees.
Tab "Side by Side"
The comparison tab shows current vs consolidated across five metrics: monthly payment, total interest, interest savings, payoff timeline difference, and break-even month — the month at which your fee savings have paid back the upfront origination cost.
The Formulas
PMT = P × r_m × (1 + r_m)^n / ((1 + r_m)^n − 1)
where P = loan amount, r_m = annual rate / 12, n = total months
Total interest:
Total interest = (PMT × n) − P
Weighted average rate:
WAR = sum(balance_i × rate_i) / total balance
Consolidation saves interest when the new rate is below WAR
Break-even months (with origination fee):
Break-even = ceil(fee amount / monthly savings)
where monthly savings = current total min payment − new monthly payment
All calculations use standard financial mathematics. No country-specific tax rates or regulations are applied. Results are estimates only.
Worked Examples
Example 1 — Three Debts: Current Situation
A borrower has three debts and wants to understand their total monthly cost and interest exposure.
| Debt | Balance | Rate | Min payment |
|---|---|---|---|
| Credit Card | $5,000 | 22% | $150/mo |
| Car Loan | $8,000 | 7% | $200/mo |
| Personal Loan | $3,000 | 12% | $100/mo |
Calculation: WAR = (5000×22 + 8000×7 + 3000×12) / 16000 = 204,000 / 16000 = 12.75%. Any consolidation loan below 12.75% will reduce total interest paid.
Example 2 — Consolidate $16,000 at 9% for 5 Years (No Fee)
The borrower qualifies for a personal loan at 9% annual rate, repaid over 60 months.
The new monthly payment of $332 saves $118/month. Total interest falls from $4,180 to $3,920. With no origination fee, the benefit is immediate from month 1.
Example 3 — Same Deal with 3% Origination Fee
The lender charges a 3% origination fee on the $16,000 loan. How long until the fee pays back?
After month 5, the $118/month savings more than offset the $480 fee. Over the full 60-month term, total monthly savings = 60 × $118 = $7,080 — far exceeding the fee. Even though the fee slightly exceeds pure interest savings, the cash flow benefit is substantial.
When Does Consolidation Make Sense?
Lower Rate Than Your Weighted Average
The primary test: is the new consolidation rate below your weighted average rate? If you have a credit card at 22%, a car loan at 7%, and a personal loan at 12%, your weighted average is about 12.75%. Any consolidation rate below 12.75% reduces your total interest cost.
Simplified Payments
Managing five minimum payments across different due dates increases the risk of a late payment, which triggers penalty rates or fees. Consolidation reduces this to a single monthly payment, lowering administrative risk. This benefit exists even if the rate difference is modest.
Improved Cash Flow
A lower monthly payment (even at a higher total interest cost over a longer term) frees up cash flow for emergencies, investing, or other goals. The trade-off is paying more in total interest. The Side by Side tab makes this trade-off explicit so you can decide consciously.
When Consolidation May NOT Help
Consolidation is less attractive when: the new rate is higher than your weighted average; the term is so long that total interest exceeds your current path; the origination fee wipes out savings; or you plan to pay off the debt quickly anyway (a 3-year payoff plan rarely benefits from a 5-year consolidation loan).
Secured vs Unsecured Consolidation
A home equity loan or HELOC often offers lower rates but converts unsecured debt (credit card) into secured debt (backed by your home). If you cannot make payments, you risk losing the asset. Unsecured personal loans carry higher rates but no collateral risk. This calculator models both — just enter the appropriate rate.