Debt Consolidation Calculator

Quick Answer

Last updated: 10 November 2026 ·How we calculate this: month-by-month payoff and the loan payment formula

How This Debt Consolidation Calculator Works

Enter up to three debts with their balance, APR and monthly payment, then the rate, term and fee of the consolidation loan you are offered. The calculator pays off each current debt month by month to find how long it takes and how much interest it costs. It then works out the loan needed to clear all of them after the fee, its monthly payment, and the total interest plus fee. The result shows whether consolidating saves or costs money.

How to Use the Debt Consolidation Calculator

1. Enter each debt’s balance, APR and monthly payment.
2. Leave debt 3 blank if you have only two debts.
3. Enter the consolidation loan’s APR, term and fee.
4. Press Calculate.
5. Compare the monthly payment, payoff time and total cost.

Formulas Used

• Current debts: each month, interest = balance × APR ÷ 12; new balance = balance + interest − payment.
• Loan amount with fee: loan = total debts ÷ (1 − fee %).
• Loan payment: M = L × r ÷ (1 − (1 + r)^−n), with r = APR ÷ 12 and n = months.
• Saving: current interest − (loan interest + fee).

Key Terms

• Debt consolidation: combining several debts into one new loan or account.
• APR: the yearly cost of borrowing, including some fees.
• Origination fee: a one-time loan fee, often a percentage taken from the loan.
• Loan term: how long you have to repay the loan.
• Balance transfer: moving card debt to another card, often at a promotional rate.

Worked Example

Three cards: $6,000 at 24% ($250 a month), $4,000 at 19% ($150) and $2,500 at 27% ($100).

• Paying as now: $500.00 a month, debt-free in 38 months, $4,709.12 in interest.
• 4-year loan at 11% with a 5% fee: borrow $13,157.89, pay $340.07 a month, cost $3,823.49 in interest and fees, saving $885.63.
• 7-year loan, same rate and fee: $225.30 a month, cost $6,424.80, which is $1,715.68 more than paying as now, and you stay in debt for 84 months instead of 38.

Real-Life Examples

• Checking a loan offer: $12,500 of card debt moved to a 4-year 11% loan with a 5% fee saves about $885.63.
• Seeing the cost of a longer term: the same loan over 7 years cuts the payment to $225.30 but costs $1,715.68 more overall.
• Lowering a monthly budget: compare $500.00 now with $340.07 on the 4-year loan.
• Testing fees: set the fee to 0% and 8% to see how much it changes the answer.

Debt Consolidation Loan vs Balance Transfer

• Consolidation loan: a fixed rate and fixed payments over a set term, often with an origination fee.
• Balance transfer card: 0% or a low rate for a promotional period, a transfer fee, then a higher card rate.
• A loan suits larger balances you need several years to repay; a transfer suits balances you can clear within the promotion.

Cautions From the CFPB

• Longer terms: a lower monthly payment often comes from a longer term, which can cost much more overall.
• Teaser rates: a low starting rate may rise later.
• Fees: loans and balance transfers usually have fees or costs; include them in the comparison.
• Home equity loans: lower rates, but you could lose your home if you cannot repay.
• Debt settlement ads: be wary of companies that charge upfront fees or tell you to stop paying creditors.

Other Ways to Pay Off Debt

A 0% balance transfer card can beat a loan if you can clear the balance before the offer ends; check the transfer fee and the rate afterwards. The avalanche method (extra money to the highest APR first) usually saves the most interest without a new loan, and the snowball method (smallest balance first) gives quick wins.

Free nonprofit credit counselling can help you set a budget or a debt management plan, and you can ask your card issuers for a lower rate. Whatever you choose, the key is to stop adding new debt while you pay down the old.

Common Mistakes to Avoid

• Comparing only the monthly payment. Look at total interest and fees too.
• Ignoring the fee. A 5% fee on $13,000 is $650 before any interest.
• Stretching the term. More years at a lower rate can cost more than fewer years at a higher one.
• Running the cards up again. Then you have the loan and new card debt.
• Using your home as security without care. Missing payments could put your home at risk.

Frequently Asked Questions

References & Sources