Debt Consolidation Calculator · Practical guide
Is Debt Consolidation Worth It?
It pays off when the new rate beats your current average and you don't stretch the term too far — here's the math.
At a glance
The Short Answer
Consolidation is worth it when the new loan's rate is meaningfully below your current average rate and the term is not stretched so long that total interest creeps back up. Run your actual balances above — the comparison table shows monthly savings and total interest savings side by side.
Interactive tool
Debt Consolidation Calculator
Enter your own values, then compare the result with the examples below.
Your Current Debts
Current Debt Summary
Consolidated Loan Summary
Savings
Savings Table
| Metric | Current | Consolidated | Savings |
|---|
A Worked Example
Three debts totaling $12,000 with combined payments of $370 a month:
| Debt | Balance | Rate | Payment |
|---|---|---|---|
| Credit card A | $5,000 | 22% | $150 |
| Credit card B | $3,000 | 18% | $90 |
| Personal loan | $4,000 | 12% | $130 |
Left alone, these take about 4.3 years to pay off and cost $4,787 in interest. Consolidated into one $12,000 loan at 10% for 4 years: payment drops to $304.35 and interest falls to $2,609 — a saving of $65.65 a month and $2,178 overall.
When It's Worth It
- Your credit qualifies you for a rate well below your card APRs — card rates above 20% make even a 10%–12% loan a clear win.
- One payment replaces several due dates, cutting the chance of late fees.
- The fixed term gives you a definite debt-free date, unlike revolving card minimums.
When It Isn't
- The new rate isn't much lower than your weighted average — fees can erase the gain.
- You stretch the term to shrink the payment: that same $12,000 at 10% over 7 years lowers the payment to $199.21 but raises total interest to $4,734 — barely better than doing nothing.
- You keep charging on the newly cleared cards and end up with both balances.
Frequently Asked Questions
Does debt consolidation hurt my credit score?
Expect a small, temporary dip from the hard inquiry and new account. On-time payments and lower credit utilization typically rebuild the score within months.
What rate do I need for consolidation to make sense?
A rate clearly below your current weighted average — for a mix of 18%–24% card debt, anything at or below about 12% usually produces real savings. Enter both scenarios above to see the exact difference.
Are there fees on consolidation loans?
Many personal loans charge origination fees of 1% to 8%, deducted from the proceeds. Subtract the fee from your projected interest savings before deciding.
Can I consolidate if my credit score is low?
You can, but the rates offered may be too high to help. If quotes come back near your existing card rates, a nonprofit credit-counseling debt management plan is often the better route.