Free Debt Consolidation Calculator

When consolidating actually helps

Consolidation replaces several debts with one loan. It simplifies your life, but simplification isn't the financial case — the case is a lower blended interest rate, and only after the origination fee is accounted for. A consolidation loan at a similar rate to what you already pay just reshuffles the debt.

Why the rate gap is the whole story

Halving the rate from 24% to 12% roughly halves the interest, even after paying $450 to originate the loan. Narrow that gap and the case weakens quickly — at 20% the savings would be modest, and at 22% the fee could erase them entirely.

Before consolidating, work out your actual blended rate: weight each debt's rate by its balance. People often assume it's higher than it is, because the most painful card isn't necessarily where most of the balance sits.

The trap: a lower payment that costs more

Consolidation almost always lowers the monthly payment, because the term is typically longer. That feels like an improvement and sometimes isn't. Stretching $15,000 over 60 or 72 months at a moderate rate can easily cost more in total than paying it off aggressively at a higher rate over three years.

This is why the calculator reports both interest and time. A result showing lower interest but a longer payoff is a genuine trade-off; a result showing more interest and a longer payoff is simply a worse deal wearing a smaller payment.

What the origination fee does

Most personal loans deduct an origination fee, commonly 1–8%, from the amount disbursed — or add it to the balance, which is how this calculator models it. A 3% fee on $15,000 is $450, meaning you borrow $15,450 to pay off $15,000.

Compare offers on APR rather than the interest rate, since APR incorporates the fee. A loan with a lower rate but a much higher fee can be the more expensive option.

The behavioral risk nobody prices in

Consolidating credit card debt leaves those cards open with zero balances. If they get used again, you now have the consolidation loan and new card debt — the most common way consolidation makes things worse rather than better.

The strategy only works paired with whatever change stopped the balances from accumulating in the first place. If that hasn't been addressed, consolidation treats the symptom.

Other options worth comparing

• Balance transfer cards offering 0% for a promotional period can beat a consolidation loan for balances you can clear inside that window. Watch the transfer fee and the post-promotional rate.
• Home equity borrowing usually offers lower rates, but secures the debt against your house — see the Home Equity Calculator for that trade-off.
• The avalanche method requires no new loan and no fee. The Debt Payoff Calculator shows what focused extra payments alone accomplish.
• Nonprofit credit counseling can negotiate reduced rates through a debt management plan, which is distinct from for-profit debt settlement.

What this calculator doesn't include

It models your current debts as one blended balance and rate, which is a simplification — real payoff order across several rates differs slightly. It doesn't account for prepayment penalties, late fees, promotional rates that expire, credit-score effects (a new loan and a hard inquiry typically dip your score briefly, while lower utilization may help it later), or the possibility that you won't qualify for the rate you entered.

Advertised rates generally reflect the strongest credit profiles. Many lenders offer pre-qualification with a soft inquiry, which shows your actual rate before you commit.