Debt Consolidation Calculator — Compare Costs & Savings
Should you consolidate your debts? Enter your total current debt, your existing average APR and monthly payments, then the rate and term of the consolidation loan. See the interest saved, the new monthly payment, how much sooner (or later) you will be debt-free, and when you break even on any origination fee.
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months
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Total interest saved over the life of the loan
$25,496.45
total paidPrincipal
78.4%
New interest
21.6%
- 1
Monthly rate (new loan)
10% ÷ 12 ÷ 100 = 0.008333 - 2
Growth factor
(1 + 0.008333)^60 = 1.6453 - 3
New monthly payment
20,000 × 0.008333 × 1.6453 ÷ (1.6453 − 1) = 424.94 - 4
New total interest
424.94 × 60 − 20,000 = 5,496.45 - 5
Interest saved
11,933.85 − 5,496.45 = 6,437.39Current total interest computed by simulating month-by-month payoff at the current APR.
How does this calculator work?
Consolidation saves money when the new APR is meaningfully below your current average rate. New monthly payment = P × r(1+r)^n/((1+r)^n−1). Interest saved = old total interest − new total interest. Enter current debt, rate, payment, plus new loan rate and term to see savings, payoff timing and fee break-even.
Formula
How this is calculated
Debt consolidation replaces several high-rate balances with a single lower-rate loan, ideally reducing both the interest rate and the monthly payment. The consolidation loan uses standard amortisation: each month you pay a fixed amount, part covering interest (balance × monthly rate) and the rest reducing principal, until fully paid.
The calculator models your current situation by treating your combined debt as a single balance at your current average APR and running down the balance using your existing minimum payments. It then models the consolidation loan at the new rate and term and computes the difference in total interest. A lower rate or shorter term reduces total interest; a longer term may lower the monthly payment at the cost of more interest overall.
An origination fee is added to the consolidated principal before computing amortisation. The break-even point tells you how many months of interest savings it takes to recover that fee — useful for short-tenure loans where the savings may not materialise. Note that this calculator assumes no prepayment and no additional debt: if you charge more to credit cards after consolidating, the savings evaporate.
Frequently asked questions
Applying for a consolidation loan triggers a hard inquiry, typically lowering your score by a few points temporarily. Over time, paying down balances (especially credit card utilisation) and maintaining on-time payments generally improves credit scores. This calculator does not model credit-score impact.
Any rate meaningfully below your current weighted-average APR saves money. Credit card APRs average 20–24% in the US (2024); personal consolidation loans typically range 8–20% depending on credit score. Even a 5-percentage-point reduction on $20,000 can save $3,000–$6,000 over a 5-year term.
A longer term lowers the monthly payment — which can help cash-flow — but increases total interest paid. The trade-off is worth it if the lower payment prevents missing payments or lets you maintain an emergency fund. Ideally combine a lower rate with the shortest term your budget allows.
Also known as
TG we-Calculate Editorial Team. (2026). Debt Consolidation Calculator — Compare Costs & Savings [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/debt-consolidation-calculator
TG we-Calculate Editorial Team. "Debt Consolidation Calculator — Compare Costs & Savings." TG we-Calculate. 2026. https://we-calculate.com/calculator/debt-consolidation-calculator.
TG we-Calculate Editorial Team, "Debt Consolidation Calculator — Compare Costs & Savings," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/debt-consolidation-calculator
@misc{wecalculate_debt_consolidation_calculator, title = {Debt Consolidation Calculator — Compare Costs & Savings}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/debt-consolidation-calculator}}, year = {2026}, note = {TG we-Calculate} }
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