Debt Consolidation Calculator
Debt consolidation replaces several balances with one loan at a fixed rate and term. It saves money when the loan's APR plus any origination fee is clearly below the weighted average rate of the debts it replaces. Two 24% cards totaling $10,000 rolled into a 12% loan over 36 months with a 3% fee cost about $2,300 in interest and fees, versus roughly $5,200 staying on the cards at the same monthly payment.
The same debts into a 22% loan with a 5% fee cost more than the cards. This calculator amortizes the loan, runs your existing debts through the avalanche order at exactly the loan's monthly payment, and reports the break-even APR: the loan rate at which both paths cost the same. Below it, the loan wins; above it, keep the debts and pay them directly.
Results
Compared with paying the debts directly at the same $465 a month
Saves $2,900
A $14,111 loan at 11.5% over 36 months costs $3,052 in interest and fees, versus $5,952 paying the debts directly. The break-even APR is shown once you run your numbers.
Your debts total $13,700. A 11.5% loan with a 3% fee cuts total cost by $2,900 than paying the highest-rate debt first with the same $465 a month.
Consolidation only works if the old cards stay at zero. Running them back up means paying both.
Enable JavaScript to edit the numbers above and see your own plan, charts, and month-by-month schedule.
Frequently asked questions
When is debt consolidation worth it?
When the new loan's APR, after adding the origination fee, is meaningfully below the balance-weighted average rate of the debts it replaces, and you do not run the old cards back up. As a rule of thumb the loan rate needs to be at least a few points below your average card rate for a fee to pay for itself.
What is the break-even APR?
The loan interest rate at which the consolidation loan costs exactly the same as paying your current debts directly, in avalanche order, with the same monthly payment. If you can get a rate below it, the loan saves money; above it, the loan loses. It is the single most useful number to take into a rate comparison.
How does an origination fee change the math?
The fee is added to the loan principal, so you borrow and pay interest on more than you owed. A 5% fee on $10,000 means a $10,500 loan. On short terms the fee can outweigh a rate improvement of several points, which is why a 22% loan with a 5% fee loses to 24% cards at the same payment.
Why does the calculator compare at the same monthly payment?
Because a loan's lower monthly payment often comes from a longer term, not a cheaper rate. Comparing total cost at the same outlay isolates the rate effect. If you could pay the loan's payment amount, you could pay that same amount toward your existing debts, and the calculator shows which path costs less.
What rate can I expect on a consolidation loan?
It varies with credit profile, income and lender. Broadly, excellent credit sees single digits to low teens, good credit low-to-mid teens, fair credit high teens to twenties, and poor credit rates near or above card rates, if approved at all. Prequalify with several lenders to see real numbers; that usually does not affect your score.
Does consolidation hurt my credit?
Applying creates a hard inquiry and a new account, both minor. Paying off cards with the loan drops your utilization, which typically raises your score within a couple of months. The real risk is behavioral: if the cleared cards get used again, you carry both the loan and new card debt.