Debt Consolidation Calculator
Enter your current debts below
Debt consolidation combines multiple debts into a single loan, ideally at a lower interest rate. It simplifies payments and can reduce total interest paid. However, extending the repayment term can sometimes increase total interest even at a lower rate.
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Tip: Consolidation only helps if you stop accumulating new debt. Many people consolidate, then rebuild their credit card balances — ending up worse off. Address the spending behavior, not just the numbers.
- 1Sum all debt balances to find the consolidation loan amount needed
- 2Compare the new consolidated interest rate to weighted average of current rates
- 3Calculate new monthly payment using the loan payment formula
- 4Compare total interest paid: consolidated vs current debts
$5k at 22% + $8k at 18% → consolidated at 10%, 60 months=Save $3,000+ in interest, lower monthly paymentBreak-even: rate difference matters more than term
| Option | Interest Rate | Pros | Cons |
|---|---|---|---|
| Personal loan | 8–20% | Fixed rate, fixed term | Rate depends on credit score |
| Home equity loan | 6–9% | Low rate | Home is collateral — risky |
| Balance transfer card | 0% intro | Interest-free period | 3–5% fee, rate spikes after |
| Credit union loan | 6–18% | Member-friendly rates | Must be a member |
| Debt management plan | Reduced | Professional negotiation | Closes accounts, affects credit |
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Fun Fact
Americans carried over $1 trillion in credit card debt in 2023, with an average interest rate of 21%. Consolidating even half of that at 10% would save US consumers billions in interest annually.
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