$610.32
$139.68
47
months
$34,916.64
$29,295.51
$9,916.64
$4,295.51
$5,621.14
$610.32
$139.68
47
months
$34,916.64
$29,295.51
$9,916.64
$4,295.51
$5,621.14
The Debt Consolidation Calculator compares your current debt situation against a consolidation loan to show potential monthly and total savings. Debt consolidation combines multiple high-interest debts (credit cards, personal loans, medical bills) into a single loan with a lower interest rate, simplifying payments and potentially saving thousands in interest.
The average American household carries $7,951 in credit card debt, often spread across 3-4 cards with rates ranging from 18% to 28%. When you add personal loans, medical debt, and store credit, the total can be overwhelming — both financially and psychologically. Debt consolidation addresses both issues by converting multiple variable payments into a single fixed payment at a lower rate.
However, consolidation is not always the best strategy. The key question is whether the total cost (not just the monthly payment) decreases. Some consolidation loans reduce your monthly payment by extending the term, which can actually increase total interest paid. This calculator shows both the monthly savings and the total savings to help you make a truly informed decision.
Consolidation works best when you can qualify for a significantly lower interest rate than your current average. If you are paying 18-24% on credit cards and can get a consolidation loan at 8-12%, the interest savings are substantial. Common consolidation options include personal loans, balance transfer credit cards (0-3% introductory rates), home equity loans (5-8%), and debt management plans through credit counseling agencies.
The most important factor in successful debt consolidation is not running up new debt on the accounts you paid off. Many people consolidate their credit card debt into a personal loan, then gradually charge up their credit cards again, ending up with more debt than before. Pair consolidation with a budget that prevents new debt accumulation.
New Monthly Payment = Debt × r × (1+r)^n / ((1+r)^n − 1), using the consolidation rate and term.
Current Payoff Time = −log(1 − r_old × Debt / Current Payment) / log(1 + r_old).
Monthly Savings = Current Payment − New Payment. Total Savings = Total Current Cost − Total Consolidation Cost.
Look at the total savings, not just monthly savings. If total savings is negative, the consolidation extends your debt and costs more overall despite a lower monthly payment. Ensure the consolidation rate is significantly lower than your current average rate for maximum benefit.
Inputs
Results
Consolidating $20K of 22% credit card debt into an 8% loan saves $112/month and $6,564 total.
Inputs
Results
Consolidating $35K of mixed debt (18% avg) into a 9.5% loan for 60 months saves $165/month.
Debt consolidation combines multiple debts into a single loan with one monthly payment, ideally at a lower interest rate. The goal is to simplify payments and reduce total interest cost.
Initially, the hard credit inquiry may lower your score by 5-10 points. However, consolidation often improves credit over time by reducing utilization, establishing a fixed payment history, and simplifying bill management.
Personal loan (most common), balance transfer credit card (0% intro rate), home equity loan/HELOC (lowest rates but risks your home), and debt management plan through a nonprofit credit counselor.
When the total cost is higher (longer term negates the rate savings), when you cannot qualify for a significantly lower rate, or when you are likely to run up new debt on cleared credit cards.
With good credit (720+): 6-10%. Fair credit (650-719): 10-18%. Poor credit (below 650): 18-36%. Compare multiple lenders and consider credit union options.
If you can get a much lower rate, consolidation saves more. If rates are similar, the avalanche method (paying extra on the highest-rate debt) may be better since it avoids fees and does not require a new loan.
Balance transfer cards offer 0% intro rates (12-21 months) but charge 3-5% transfer fees and revert to high rates after the promo period. They work best for amounts you can pay off during the intro period.
Technically yes, with a personal loan. However, consolidating federal student loans into a personal loan forfeits federal protections (IDR plans, forgiveness, deferment). Keep federal student loans separate.
Savings depend on the rate difference and amount. Consolidating $25,000 from 20% to 8% can save $10,000+ in interest. Use this calculator to see your specific savings.
Consolidation pays debts in full at a lower rate. Settlement negotiates to pay less than owed (typically 40-60%), which severely damages credit and may trigger tax liability on forgiven amounts.
Roboculator Team
The Roboculator Team explains calculations, planning tools, and practical formulas in clear language for real-life situations.
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