Debt Consolidation Calculator

Use the debt consolidation calculator to determine your new monthly payments and how long it will take you to become debt-free if you consolidate your debts. The tool's high functionality ensures broad applicability; for example, you can use the debt consolidation loan calculator to support decision-making when consolidating credit card debt, or you can use it to study any other consolidation loan.

An in-depth comparison between the dynamic chart and the tables of payment schedules provides a comprehensive platform for analysis. Read further to learn what a debt consolidation loan is, how debt consolidation works, and how to consolidate credit card debt.

If you have multiple debts and are looking for ways to eliminate them faster or reduce interest charges, our debt snowball calculator or refinance break-even calculator may be practical for debt management purposes.

Before we talk about debt consolidation, it’s important to understand how interest rates and total loan costs work.

• Interest is the extra money you pay on top of the amount you borrow.
• The APR (Annual Percentage Rate) shows the true cost of the loan because it includes both the interest rate and any fees the lender charges, like origination fees.

Looking at the APR gives you a better idea of how much the loan will really cost you over time. When you compare different loan offers, be sure to check the APR, not just the interest rates.

Debt consolidation refers to the process of rolling multiple debts into a larger, single-payment loan. In other words, we may phrase the debt consolidation definition as a replacement of several small debts, such as personal loans and credit card debt, with one consolidation loan.

It can be especially beneficial when you would like to reorganize multiple bills with different high-interest rates, payments, and due dates. Therefore, in general, when turning to a debt consolidation loan, you should aim to get the most out of the following benefits:

• Simplify the repayment structure;
• Lower the interest charges;
• Reduce the monthly payment; and
• Shorten the payoff period.

With our debt consolidation loan calculator, you can compare your current debt with the given consolidation loan across all of the above contexts. Read further, and we'll show you how to consolidate your debt with the help of the present tool.

Not sure whether debt consolidation is a good idea? Read the points below that summarize the main benefits of a consolidation loan. This should help you discover if it's worth doing in your case:

• If you have multiple credit cards with double-digit interest rates, you have a reasonable chance of finding a consolidation personal loan at a lower rate and save a hefty amount of money in interest and fees.
• If you have various loans with very distinct repayment structures, debt consolidation would simplify your finances by combining multiple debts into one monthly payment with a fixed rate.
• If you consolidate your debt for paying off multiple revolving credit card balances, you have a chance to lower your credit utilization rate and by extension improve your credit score.

To find out how debt consolidation works in your case, check the following instructions and use the debt consolidation calculator:

1. Number of debts: For the first step, you need to set the number of debts you have. Note that the maximum number of debts is six, and you must have at least two debts to apply the debt consolidation calculator.

2. Type of payments: You need to choose the required way to make the monthly payments:

   • All minimum: if there is a required monthly minimum, you can increase your payments for each of your debts at any time. Credit card debts or personal loans usually operate with such a payment type.
   • All fixed: when monthly payments are set, you cannot change the monthly amounts of any of your debts.
   • Varied: choose this option if you would like to set the payment type individually at each of your debts.

3. Debt specifications: Set the debt balances with their related interest rates and monthly payment amounts. If you choose a varied type of payment, you need to set this parameter as well.

4. Debt consolidation loan: Specify the parameters of the debt consolidation loan:

   • Amount to be consolidated: the consolidation loan amount might be the same as your total debt, but it can differ.
   • Interest rate: It is the annual nominal interest rate.
   • First due date: The date that indicates when you need to pay the first installment.
   • Loan term: The lifetime of the loan.
   • Prepaid fee: You can set here any finance charges that you need to pay before originating the loan. You may include here the closing cost of any of your existing debts (if any).
   • Loaned fee: Include here any fee or charges that you need to pay back with the consolidated loan. Note that your principal balance increases by this amount, which means that interest is charged on this fee.

5. Borrowing details

This section shows you the necessary comparisons between the current debt and the specified consolidation loan. The most instrumental index for comparison from the perspective of cost of borrowing is the APR (Annual Percentage Rate), which shows you if it's cheaper or more expensive to take the consolidation loan.

6. Summary

Below is the summary section, where you can learn the most relevant features of your current debt and the consolidation loan:

• Balance: The principal balance to be repaid.
• APR: we show you the actual Annual Percentage Rate for both cases, which is the most compact way to compare debts from the borrowing cost perspective.
• Monthly payment: you can see the precise allocation of payment for each of your debt in the payment schedule table.
• Payoff term: you can learn the remaining time in both scenarios.
• Total payable and Total interest.

6. Balances

In the dynamic chart, you can follow the balances of both the current debt and the consolidation loan.

7. Payment schedules

Finally, you can check the table of payment schedules for each of your debts and the consolidation loan.

When you consolidate your debt, it’s important to know about the extra fees that might come with it. Here are some common fees to watch for:

• Origination fee – A one-time fee charged for setting up your loan, often around 1% to 8% of the loan amount.
• Balance transfer fee – A fee for moving your credit card debt to a new card.
• Closing costs – Similar to fees you pay when closing on a mortgage.
• Early repayment penalty – Some loans charge a fee if you pay off your debt earlier than planned.

Always read the terms carefully so you’re not surprised by extra costs.

Yes, debt consolidation can cause a small, temporary drop in your credit score. However, debt consolidation can improve your score over time if you make payments on time.

If you're in the US, major banks like Wells Fargo, Discover, and Goldman Sachs offer debt consolidation loans. If you're in Europe, banks like Santander or ING often provide personal loans that can be used for debt consolidation.

To calculate debt consolidation loan, you can:

1. Add up the total amount of all debts you want to consolidate.
2. Find out the interest rate (APR) and any fees for the new consolidation loan.
3. Use a loan calculator to estimate your new monthly payment and total repayment cost.

You should consider the debt consolidation calculator as a model for financial approximation. All payment figures, balances, and interests are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive.

For this reason, we created the calculator for instructional purposes only. Yet, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice.