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Debt Consolidation Calculator
A consolidation loan replaces several debts with one fixed payment. Whether it actually saves you money depends on the rate, the fee, and the loan length. Enter your numbers below to see the real cost side by side.
Compare Your Options
Lower Payment Is Not the Same as Lower Cost
Lenders often advertise how much lower your monthly payment will be. That number alone can be misleading. Here's the same $15,000 of credit card debt at 24%, currently being paid at $500 a month, compared with two loan offers, both with a 5% origination fee:
| Option | Monthly Payment | Time to Pay Off | Total Interest + Fees |
|---|---|---|---|
| Keep paying the cards | $500 | 3 yrs 11 mo | $8,137 |
| Loan: 11% for 3 years | $517 | 3 yrs | $3,609 |
| Loan: 17% for 5 years | $392 | 5 yrs | $8,545 |
The 3-year loan costs $17 more a month but saves about $4,500 and finishes 11 months sooner. The 5-year loan feels easier at $392 a month, yet it ends up costing more than doing nothing. Always compare total cost, not just the payment.
Why Consolidation Can Save Money
Personal loans usually cost much less than credit cards. In the second quarter of 2026, the Federal Reserve reported an average rate of 11.86% on 24-month personal loans from commercial banks, compared with 22.15% on credit card accounts that were charged interest. Cutting your rate roughly in half means more of each payment reduces what you owe. Your actual offer depends on your credit score, income, and existing debt, so check prequalified rates before relying on any average.
When Debt Consolidation Makes Sense
- The new rate is clearly lower than the average rate on the debts you're replacing, after including the fee.
- The loan term is similar to or shorter than your current payoff timeline.
- The payment fits your budget comfortably, with room for your regular bills and a small emergency cushion.
- You've dealt with why the debt built up, so the paid-off cards won't fill up again.
When to Think Twice
- The offer only beats your current rate by a point or two once the fee is counted.
- You'd be stretching repayment over five years or more just to get a lower payment.
- You'd be turning unsecured card debt into debt secured by your home or car. Missing payments could then put that asset at risk.
- You're consolidating federal student loans into a private loan, which gives up income-driven repayment and forgiveness options.
If consolidation doesn't add up, a focused plan with the avalanche method can get you a similar result with no new loan. Use the multi-debt calculator to compare.
Consolidation Loan vs. Balance Transfer vs. Credit Counseling
Personal consolidation loan
Fixed rate, fixed payment, and a set end date. Good for larger balances that will take two to five years to clear. Rates depend heavily on your credit.
0% balance transfer card
No interest for an intro period (often 12 to 21 months) plus a transfer fee of about 3% to 5%. Cheapest option if you can repay before the promo ends. See our credit card payoff calculator to check the monthly payment needed.
Nonprofit credit counseling
If you can't qualify for a better rate, a nonprofit credit counseling agency may offer a debt management plan. Counselors work with your card issuers to lower interest rates and combine payments into one. Expect a small monthly fee, and your cards are usually closed during the plan.
Be careful with "debt settlement" companies that tell you to stop paying your creditors. Late fees and credit damage pile up while you wait, and forgiven debt may count as taxable income.
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Frequently Asked Questions
Does debt consolidation hurt your credit?
Applying causes a hard inquiry, which may lower your score slightly for a short time. Over the longer term, paying off card balances usually lowers your credit utilization and on-time loan payments build your history, which can help your score.
What is an origination fee?
A one-time charge, often 1% to 8% of the loan, usually deducted from the money you receive. You need to borrow a little more than you owe to cover it, which this calculator accounts for.
Is a balance transfer better than a consolidation loan?
A 0% balance transfer is often cheaper if you can repay the full amount before the promotional period ends. A fixed-rate loan is more predictable for larger balances that will take several years to repay.
Why would a lower monthly payment cost more?
A longer loan term spreads payments out, so interest is charged for more months. Even at a lower rate, a five-year loan can cost more in total than paying off your current debts faster.
Disclaimer: Results are estimates for educational purposes and are not financial advice. Actual loan terms depend on your credit and the lender. Read more about how our calculators work.
Sources
- Board of Governors of the Federal Reserve System, "G.19 Consumer Credit," September 2026. federalreserve.gov