Debt Consolidation Calculator
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Is Debt Consolidation Actually Worth It?
Debt consolidation replaces several separate balances with a single new loan — ideally one with a lower rate, a single payment date, and a predictable payoff schedule. But it isn't automatically a win: this calculator runs both paths side by side so you can see the real numbers instead of assuming a lower rate always means lower cost.
One Loan Replaces Many
Instead of juggling separate due dates and rates across multiple cards or loans, a consolidation loan combines the total balance into a single fixed-rate installment loan with one monthly payment.
Rate Isn't the Whole Story
A lower interest rate helps, but the new loan's term matters just as much. Stretching the same balance over a much longer term can erase — or even reverse — the interest savings from a lower rate.
Compare the Whole Burden
"Current path" totals the payments you're already making across every existing debt. Compare that combined monthly burden — not just one card's payment — against the single new consolidated payment.
Discipline Still Matters
Consolidating pays off existing balances, but it doesn't close the underlying spending habits that created them. Consolidation works best paired with not re-accumulating balance on the cards you just paid off.
Worked Example
Three existing debts — a $6,000 credit card at 24% APR ($200/mo), a $1,500 store card at 18% APR ($60/mo), and a $3,000 personal loan at 15% APR ($150/mo) — versus a new $10,500 consolidation loan at 10% APR over 3 years:
- Current path (combined): $410/month, 47 months to clear the last balance, $4,122.66 in total interest.
- Consolidated path: $338.81/month for 36 months, $1,696.96 in total interest.
- Result: about $2,425.70 less interest and $71.19 less per month — a clear win on both fronts here.
Current vs. Consolidated
- Current combined payment: $410.00/mo
- Consolidated payment: $338.81/mo
- Current total interest: $4,122.66
- Consolidated total interest: $1,696.96
When Consolidation Can Backfire
If the new loan's term is long enough, even a lower rate can produce more total interest than paying off the original debts on their current (often more aggressive) schedules. Always compare total interest and total months side by side — not just the monthly payment — before signing on to a consolidation loan.
A note on this calculator: the "current path" assumes each existing debt continues being paid at exactly the fixed monthly payment you enter for it today, amortized independently until it reaches zero (capped at 600 months per debt as a safety limit). The combined timeline is driven by whichever debt takes the longest to clear on its own.
Key Takeaways
- Compare Both Interest and Payment: A consolidation loan can lower your monthly payment while still costing more in total interest, or vice versa — check both numbers.
- Term Length Is the Hidden Lever: A longer consolidation term can offset a lower rate's savings — shorter terms usually save the most.
- Combined Burden, Not Just One Card: Always weigh the new payment against everything you're currently paying across all debts, not just your largest one.
- Prefer a Payoff Order Instead? If you'd rather keep your existing debts separate and just optimize the order you pay them off in, see our Debt Payoff Calculator for snowball/avalanche strategies.