Debt Consolidation Calculator

If you're juggling several credit card balances at high rates, a consolidation loan can lower your interest and give you one payment with a clear end date. But fees and loan terms matter. This calculator compares your current debts with a single consolidation loan.

What this calculator does

Enter up to three debts, each with its balance, interest rate and monthly payment, plus the consolidation loan's rate, term and origination fee. It shows:

• the interest saved by consolidating,
• the new monthly payment,
• your current total monthly payments,
• the interest you'd pay on current debts,
• the interest and fee on the new loan, and
• how many months until your current debts are paid off.

The formula in plain English

For each current debt, the calculator follows the balance month by month with its payment until it's paid off, adding up interest.

Consolidation loan amount = total balances ÷ (1 − origination fee %), so the loan covers every balance after the fee.

New payment = the standard loan payment on that amount for the term and rate.

New cost = new payment × number of months − total balances. This includes both interest and the fee.

Interest saved = interest on current debts − new cost.

A worked example

Jamie has three debts:

• $9,000 at 24.9%, paying $300.
• $5,000 at 21.9%, paying $180.
• $4,000 at 13.5%, paying $150.

That's $18,000 in total and $630 a month, with about $8,050 in interest before everything is paid off in about 48 months.

A consolidation loan at 11.5% for 48 months with a 3% fee:

• New payment: about $484 a month.
• Interest and fee: about $5,240.
• Interest saved: about $2,810, with a payment about $146 lower.

If Jamie kept paying $630 a month on the new loan, it would be paid off even faster.

Why it matters at each career stage

If you're: Student

If you've built up card balances during school, a consolidation loan may not be available until you have income. Focus on avoiding new balances.

If you're: Resident / fellow

A steady resident salary can help you qualify for a consolidation loan. Paying off high-rate cards in training frees up cash flow for the rest of residency.

If you're: Employed

With a higher income, you may qualify for low rates. Consider paying the debt off aggressively after consolidating, using the payment you were already making.

Making consolidation work

Stop adding new debt. Consolidation only helps if the old cards stay paid off.

Compare offers. Check rates and fees from banks, credit unions and online lenders.

Watch the term. A longer term lowers the payment but can raise total cost.

Keep paying the same amount. If you can, keep paying what you paid before to finish faster.

Build an emergency fund. It keeps unexpected costs from going back on cards.

Reading a loan offer

When you compare consolidation offers, look at the APR, not just the interest rate, because APR includes the origination fee. Check whether the rate is fixed, whether there's a prepayment penalty, and whether the lender pays your cards directly or sends you the money. Direct payment to creditors removes the temptation to use the funds for something else. Finally, confirm the monthly payment fits your budget with room to spare.

Alternatives

Balance transfer card. 0% for 12–21 months, if you can pay it off in time.

Snowball or avalanche. Pay off debts one at a time without a new loan.

Credit counseling. Nonprofit agencies can set up a debt management plan with lower rates.

Next, see how long a single card takes with the credit card payoff calculator, plan a full debt payoff and set a budget.