Debt Consolidation Calculator
Total cost difference and monthly payment change from consolidating multiple debts into one loan.
Compare paying off existing debts vs consolidating into one new loan. See total cost saved or added, monthly payment change, and months difference.
What this tool does
This calculator compares two repayment paths: continuing with multiple existing debts at their current rates and payments, or consolidating them into a single new loan. Enter your total debt amount, average current interest rate, current monthly payment, the consolidation loan's rate, loan term in months, and any origination fee. The calculator estimates the total cost difference between both paths, how your monthly payment would change, and the difference in payoff timeline. Results show whether consolidation would cost more or less overall, and how monthly cash flow would shift. The output is based on standard loan amortisation and assumes consistent payments throughout. This is a numerical illustration and does not account for variable rates, changes to payment behaviour, or other financial factors that may affect actual outcomes.
Enter Values
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
What this calculator returns
The calculator compares two paths for the same total debt. The current path keeps the existing debts at the current average rate and monthly payment, projecting how long they take to clear and how much total interest accrues. The consolidation path replaces them with a single new loan at the consolidation rate, with an upfront origination fee added to the loan principal, amortised over the consolidation term. The output is the total cost difference between the two paths — positive when consolidating is cheaper, negative when the new loan plus fee ends up costing more than staying on the existing trajectory.
How the comparison handles the fee
The origination fee is added to the consolidation loan's principal at month zero. The borrower receives only the original debt amount in cash but signs to repay the principal plus the fee, with interest accruing on the combined figure. The calculator's consolidation total cost figure therefore captures both the interest charged on the new loan and the implicit cost of the fee — it represents the all-in borrower cost above what was actually received in cash. This basis for comparison aligns the consolidation total cost against the current-path interest figure, because both numbers are then expressed as the cost above the original debt amount.
How term length changes the answer
The current path's term is whatever the existing payment naturally produces — calculated from balance, rate, and payment. The consolidation path's term is set directly by the user. Stretching the consolidation term lowers the monthly payment but raises the total interest paid; shortening the term does the reverse. A consolidation that lowers the rate but extends the term materially can end up costing more than the current path despite the lower rate, because there are more months for interest to accrue on the principal.
Why the rate alone is not the answer
A common error in evaluating a consolidation offer is comparing only the rate or only the monthly payment. A 20% rate over 2 years can produce less total interest than a 10% rate over 7 years on the same balance. The calculator runs the full math on both sides — total cash paid, total interest, term length — so the comparison is complete rather than partial. The result panel makes both sides visible separately so the borrower can see what each path produces, not just the headline difference.
What the calculator does not include
Credit-score effects of opening a new loan and closing existing accounts are outside the scope. So are changes to credit utilisation ratios, the impact of moving unsecured debt to secured borrowing (which changes the consequences of default), and any rate changes on the existing debts that may happen between now and full payoff. Behavioural factors that affect whether the consolidation is actually used as a replacement (versus running new charges on the cleared accounts) are also not modelled — the calculator answers the cost question only.
When the calculator refuses to run
The current monthly payment must exceed the monthly interest charge on the existing debt at the current rate, otherwise the existing balance does not fall and there is no payoff date to compare against. The calculator returns an explicit error in that case rather than producing a misleading figure. The consolidation rate, consolidation term, and origination fee must all be valid (non-negative).
Where to look next
The debt consolidation break-even calculator runs the simpler version of this comparison — break-even months from a given monthly saving and an upfront fee, useful when only those two figures are known rather than the full rate-and-term breakdown. The credit card payoff calculator handles a single balance under a fixed monthly payment, useful for modelling the current path on a card-by-card basis. The balance transfer savings calculator runs the math on transferring a balance to a promotional-rate card.
On a $25,000 balance, switching from 18% to 10% over 48 months with a $500 fee estimates 5,029.31 in total cost difference.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Current path: months to payoff = -ln(1 − B·r_curr / M) / ln(1 + r_curr), with r_curr = current rate / 12. Total interest = M × n − B. Consolidation path: monthly payment computed via standard amortisation on principal (B + fee) at consolidation rate over N months. Total cost = monthly × N − B, which captures both the interest on the new loan and the implicit cost of the fee added to principal. Net saving = current path interest − consolidation total cost. The simulation rejects inputs where the current monthly payment does not exceed the monthly interest charge at the current rate. All values computed at full precision and rounded only at display.
Frequently Asked Questions
How does the calculator handle the origination fee?
Why does a consolidation with a lower rate sometimes cost more in total?
What costs should be included in the origination fee field?
Does the calculator account for credit-score effects or behavioural risk?
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