Debt Consolidation Calculator
Analyze whether debt consolidation could save you money and simplify your finances
Debt Consolidation Analysis
Compare your current debts with a consolidation loan
Current Debts
Enter details for each debt you want to consolidate
Debt 1
Debt 2
Consolidation Loan Terms
Enter the terms of your proposed consolidation loan
Loan Fees & Costs
Optional fees that may apply to your consolidation loan
Understanding Debt Consolidation
Learn how debt consolidation works and when it might be the right choice for your financial situation.
What is Debt Consolidation?
Debt consolidation combines multiple debts into a single loan, typically with a lower interest rate. This can simplify payments and potentially save money on interest.
Potential Benefits
- • Lower monthly payments
- • Reduced interest rates
- • Simplified payment management
- • Fixed payment schedule
- • Potential credit score improvement
Important Considerations
- • May extend repayment period
- • Possible fees and closing costs
- • Risk of accumulating new debt
- • Impact on credit score
- • Discipline required to avoid new debt
How to Use This Calculator
Step 1: Enter Current Debts
- • List all debts you want to consolidate
- • Include current balances and interest rates
- • Enter minimum monthly payments
- • Add or remove debts as needed
Step 2: Consolidation Terms
- • Enter the interest rate offered
- • Specify the loan term in years
- • Include any origination fees
- • Add balance transfer fees if applicable
The calculator will automatically analyze your situation and provide a recommendation based on monthly payment changes, total interest savings, and payoff time.
Types of Debt Consolidation
Personal Loans
Unsecured loans with fixed rates and terms. Good for consolidating high-interest credit card debt.
Balance Transfer Cards
Credit cards offering 0% APR promotional periods for transferred balances.
Frequently Asked Questions
Consider debt consolidation when you have multiple high-interest debts, qualify for a lower interest rate, and need to simplify your payments. It's most beneficial when you can secure a significantly lower APR than your current weighted average rate.
Initially, there may be a small temporary decrease due to the credit inquiry. However, consolidation can improve your credit score long-term by reducing credit utilization and making payments more manageable, leading to consistent on-time payments.
Debt consolidation combines debts into a new loan while paying the full amount owed. Debt settlement involves negotiating to pay less than the full balance, which severely damages your credit score. Consolidation is generally the better option for maintaining good credit.
Generally, no. Closing credit cards can hurt your credit score by reducing available credit and shortening your credit history. Instead, consider keeping cards open but unused, or use them minimally and pay them off monthly to maintain an active account.