Debt Consolidation Calculator

Determine if consolidating your debts will save you money

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Debt Consolidation Calculator

The Debt Consolidation Calculator can determine whether it is financially rewarding to consolidate debts by comparing the APR (Annual Percentage Rate) of the combined debts with that of the consolidation loan. APR is the fee-adjusted financial cost of a loan, providing a more accurate basis for loan comparisons.

📋 Current Debts

# Debt name Balance Monthly payment Interest rate
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Consolidation Loan

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%
years
months
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📊 Consolidation Analysis

Analysis Result
This consolidation loan will save you money.
The APR of your current debts are 18.92%. The APR of your consolidation loan is 13.25%.
Existing debts Consolidation loan
APR 18.92% 13.25%
Monthly pay $630 $543
Time to payoff 59 months (4 years and 11 months) 60 months (5 years)
Loan fee/points $0 $1,250
Upfront cash flow
for consolidation		 $0 $-250
Total payments $36,963 $32,606
Total interests $12,963 $7,606

Cash Flow Analysis

After loan fee of $1,250, you can get $23,750 to be used to payoff your remaining debt balance of $24,000. So, you will need additional $250 for consolidation.

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📚 Understanding Debt Consolidation

What is Debt Consolidation?

Debt consolidation is a form of debt restructuring that combines several loans into one, mainly to lower either the interest rate or monthly payment amount.

APR Comparison

The real cost (real APR) of loans is higher than advertised interest rates due to upfront fees. This calculator determines the real APR for accurate comparisons.

Types of Consolidation

Common sources include home equity loans, personal loans, and balance-transfer credit cards. Secured loans typically offer lower rates than unsecured options.

Important Considerations

  • Loan Fees: Besides interest rates, loan fees or points are major costs. High fees can make consolidation less beneficial.
  • Credit Score Impact: New credit applications can temporarily lower credit scores, but timely payments will improve them over time.
  • Extended Terms: Longer loan terms may result in more interest over time, even with lower rates.
  • Root Causes: Consider addressing spending habits and budgeting before consolidating to prevent future debt accumulation.