Debt Consolidation Calculator

Two paths, one balance

Consolidation does not reduce what you owe. It replaces several debts with one, at a different rate over a different term, usually for a fee. The balance is the same on the morning after.

keep them:      each debt runs at its own rate and its own fixed paymentconsolidate:    one loan for the total, at one rate, over a fixed termcost either way: interest + fee

Because the principal is identical on both paths, the only thing worth comparing is what sits on top of it. That is why this page compares interest plus fee rather than total paid: total paid differs mostly by the balance itself, which is not a saving.

Cost and time can disagree

The worked example above saves money and finishes later. That combination is common and it is the reason a single headline number would mislead.

A lower rate reduces interest. A longer term increases the number of periods over which interest accrues, but each period is smaller. When the rate drop is large enough, the first effect wins on cost while the second still pushes the finish date out. Both facts are true at once, so this calculator shows both and leaves the trade to you.

If you want the lower payment but not the longer run, enter a shorter term and watch the payment rise. There is usually a term where the new loan beats the old debts on both measures at once.

The assumption that breaks

Every number here assumes nothing further is charged to the debts being cleared.

This is the assumption that fails most often in practice. A consolidation loan pays off a card and leaves the card open with a zero balance and the same limit. Spending against it again produces the original debt plus a consolidation loan, which is strictly worse than either. The arithmetic on this page cannot see that happening, so it is stated here instead.

Fixed minimum payments are also an idealisation. Real card minimums are a percentage of the balance and fall as it drops, which makes the current path slower and more expensive than modelled. Enter the payment you will actually keep making, not the smallest the issuer will accept.

Where this stops

It does not decide whether consolidating is a good idea. It does not model your credit, your eligibility, or whether the offer in front of you is a good one. A rate you have been quoted is an input here; nothing on this page is a quote.

It also draws no distinction between unsecured debt and a loan secured against your home. Those carry very different consequences if you cannot pay, and no interest total captures that difference.