Debt Consolidation Calculator
Find out whether one consolidation loan would save you money.
When consolidation helps
Debt consolidation replaces several debts with one loan, ideally at a lower rate. It helps if the new rate is clearly lower than your current average, the fee is small, and you do not run the cards back up afterwards.
Example
25,000 of debt at 21% with 700 a month takes about 4 years 9 months and costs about 14,575 in interest. A 5-year consolidation loan at 11% with a 3% fee has a payment of about 560 and costs about 8,592 in interest and fees, so it saves roughly 5,983 overall.
Watch out for
- A longer term lowers the monthly payment but can raise the total interest, even at a lower rate.
- Fees and secured loans (using your home as security) add risk.
- If the habit that created the debt continues, consolidation just creates more room for new debt.
Frequently asked questions
What is a good interest rate to consolidate to?
Anything clearly lower than your current weighted average, after fees. Compare offers using the total cost.
Does it hurt my credit?
Applying creates a hard enquiry, and a new loan changes your credit mix. Paying on time helps over the long run.
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