Debt Consolidation Calculator

Compare the debt you have with the loan you would actually receive

A consolidation loan can replace several payments with one fixed installment. The useful comparison is not “24% versus 11%.” It is the remaining cost and payoff time of the current plan versus all interest and fees on the new plan.

The calculator first estimates the current payoff using the total balance, weighted APR, and monthly payment. It rejects a current plan that does not cover first-month interest.

For the new loan, it assumes an origination fee is deducted from proceeds. To net enough to repay the selected debt:

amount borrowed = debt balance ÷ (1 − fee rate)

origination fee = amount borrowed − debt balance

The new monthly payment is then amortized over the selected term.

Worked example

Suppose $15,000 of debt carries a weighted 24% APR and receives $500 per month. A consolidation offer has 11% APR, a three-year term, and a 5% origination fee.

To net $15,000 after a 5% deduction, the gross loan is about $15,789.47 and the financed fee is about $789.47. The calculator applies interest to that larger principal for 36 months. Finance-cost savings equals current interest minus the new loan’s interest and origination fee.

This fee treatment is conservative when the lender charges the fee separately, but accurately shows why “5% fee on the balance” can understate required borrowing when proceeds are reduced.

Lower payment versus lower cost

A consolidation payment can fall because the APR is lower, the term is longer, or both. Only the first mechanism necessarily helps cost. Extending repayment can produce more total interest even at a lower rate.

Compare:

• complete interest plus fees;
• payoff months, not only monthly payment;
• fixed versus variable or teaser rate;
• prepayment restrictions;
• cash actually received; and
• whether paid-off cards will accumulate new balances.

Read the offer’s APR, origination fee, term, and amount financed. The personal loan calculator can inspect one offer, while the debt snowball calculator tests payoff without replacing the debt.

Consolidation does not solve cash-flow imbalance

Replacing debt can help structure repayment, but it does not fix spending that continues to exceed income. A successful plan normally includes a budget, emergency buffer, automatic payment, and a decision about access to paid-off revolving accounts.

The CFPB warns that a lower payment can hide a longer term and greater total cost. It also distinguishes consolidation from debt settlement. Be cautious with companies that promise to erase debt, demand upfront relief fees, or tell you to stop paying creditors.

Model limitations

The current side uses one weighted APR and fixed combined payment, so it cannot reproduce different card minimums or payoff ordering. The new side assumes a fixed-rate amortizing loan and a financed fee. Credit effects, taxes, late fees, variable rates, insurance products, and behavioral outcomes are not modeled.