Would rolling your debts into one loan actually save you money? This free debt consolidation loan calculator compares your new consolidated payment and interest against staying on your current rate.
This assumes you stop using the consolidated debts and don’t add new charges. Compares against paying off your current balance over the same term at your current rate.
How the Debt Consolidation Loan Calculator Works
Consolidating debt only makes sense if the new loan’s lower rate actually beats what you’re paying now over the same payoff period. This calculator turns your total debt balance, current APR, new APR, and loan term into a new monthly payment, then compares its total interest against paying off your current balance at your current rate over the same term.
Formula: Monthly Payment = Balance × [Monthly Rate × (1 + Monthly Rate)^Months] ÷ [(1 + Monthly Rate)^Months − 1], where Monthly Rate = APR ÷ 12 ÷ 100 and Months = Years × 12. Total Interest = (Monthly Payment × Months) − Balance. Interest Saved = Total Interest at the Current APR over the same term − Total Interest at the New APR.
- Total debt balance — the combined amount you currently owe across the debts you’d consolidate.
- Current avg. APR — the blended annual interest rate you’re paying on that debt today.
- New loan APR — the annual rate offered on the new consolidation loan.
- New loan term (years) — how many years you’d take to repay the new consolidation loan.
- New monthly payment — the calculated payment on the new consolidated loan.
- Interest saved — the difference between staying on your current rate and switching to the new loan, over the same term.
Example Scenarios
| Debt Balance | Current APR | New APR | Term (yrs) | New Monthly Payment | Interest Saved |
|---|---|---|---|---|---|
| $8,000 | 20% | 14% | 2 | $384 | $555 |
| $10,000 | 24% | 10% | 3 | $323 | $2,507 |
| $12,000 | 19% | 13% | 3 | $404 | $1,281 |
| $15,000 | 22% | 12% | 4 | $395 | $3,723 |
| $20,000 | 18% | 9% | 5 | $415 | $5,561 |
| $25,000 | 25% | 11% | 6 | $476 | $14,221 |
Debt Consolidation Loan Calculator FAQ
Does debt consolidation hurt or help my credit score?
It can go either way: opening a new loan may cause a temporary dip from the credit inquiry, but paying down revolving balances typically helps your credit utilization ratio over time. The long-term effect largely depends on whether you make consistent, on-time payments afterward.What happens if I keep using my credit cards after consolidating?
This calculator assumes you stop using the consolidated debts and don’t add new charges, since running the cards back up would erase the savings shown here. Racking up new balances alongside a consolidation loan payment is one of the most common ways consolidation backfires.Is a longer loan term always better for saving money?
Not necessarily: a longer term lowers your new monthly payment but can increase total interest paid if the rate difference isn’t large enough to offset the extra months. Try shortening the New loan term field to compare total interest at different lengths.What credit score do I need to qualify for a low consolidation APR?
Lenders vary, but generally the strongest APRs go to borrowers with good to excellent credit, while lower scores usually mean higher offered rates or added fees. Check quotes from multiple lenders since your actual New loan APR may differ from an average shown online.Does this calculator include origination fees or closing costs?
No, this calculator only models the balance, interest rates, and term you enter, so it doesn’t account for origination fees, prepayment penalties, or other loan costs. Factor any such fees in separately when comparing your real savings.Is debt consolidation better than a balance transfer credit card?
It depends on the numbers: a balance transfer card may offer a 0% promotional rate for a limited time, while a consolidation loan offers a fixed rate over a longer, predictable term. Compare the New loan APR and term here against the transfer card’s promotional period and post-promo rate.Related Calculators
If you’re deciding between consolidation and paying debts off individually, the debt snowball calculator lays out a payoff order for multiple balances, the credit card payoff calculator shows how long a single card would take without consolidating, and the debt-to-income ratio calculator helps you gauge whether a new loan is realistic given your income.