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Debt Consolidation Calculator

Updated · By the CalculatorDash editorial team · How we check our maths

Quick answer

Consolidation saves money when the new loan's rate, fees included, is clearly lower than what you pay now. $15,000 of card debt at 21% with $450 monthly payments costs about $22,700 in total. A 48-month loan at 11% with a 3% fee costs about $19,200, a saving of roughly $3,500.

Consolidation savings

$
%
$
%
%

Total saving

$3,524

Negative means consolidating costs more.

New monthly payment
$400
Total paid with the loan
$19,184
Total paid on current debts
$22,708

Shows 0 if current payments don't cover the interest.

Current payoff time
50 months

How this calculator works

A debt consolidation loan pays off several debts, usually credit cards, and leaves you with one fixed payment at a lower rate. This calculator compares the total you'd pay by carrying on as you are with the total cost of the new loan, including the origination fee.

The fee matters. Lenders typically deduct it from the loan, so you need to borrow slightly more than you owe. A low rate with a high fee can cost more than a slightly higher rate with no fee.

Consolidation only works if the cards stay paid off. Many people close or lock the cards they have cleared to avoid building a second balance.

The formula

Current path
months = −ln(1 − r × debt ÷ payment) ÷ ln(1 + r); total = months × payment
Loan size
debt ÷ (1 − fee)
New payment
standard amortisation over the new term
Saving
current total − new payment × months

Worked example

$15,000 at 21% paid at $450 a month takes about 50 months and costs about $22,710. To clear it with a 3% fee you borrow about $15,460. At 11% over 48 months the payment is about $400 and the total is about $19,180, saving roughly $3,520 and finishing two years sooner.

Tips

  1. 01Check your rate with a soft credit pull from several lenders before applying.
  2. 02Compare against a 0% balance transfer card if your balance is small enough to clear during the offer.
  3. 03Set up autopay; some lenders cut the rate slightly for it.

Frequently asked questions

Does debt consolidation hurt your credit?

Applying causes a small, temporary dip. Over time, lower card balances and on-time payments usually improve your score.

What credit score do I need for a consolidation loan?

Requirements vary by lender. Better scores get much lower rates, which is what makes consolidation worthwhile.

Is a longer consolidation term better?

It lowers the payment but raises the total interest. Pick the shortest term with a payment you can keep up.

What is an origination fee?

An upfront fee, often 0–10% of the loan, usually subtracted from the money you receive.