CalcVerse

Debt Consolidation Calculator

A consolidation loan only saves money if its rate, term and fees cost less than the debts it replaces. This compares the total you would pay both ways.

Also called: Consolidation loan calculator

  • Last updated
  • Formula tested against reference values

Your numbers

Use the monthly amount you actually pay on each debt.

Example rate — enter the rate you are offered.

Deducted from the loan proceeds, so you borrow a little more to clear the debts. Enter 0 if none.

Result

Total saving from consolidating
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Calculating…

New monthly payment
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Current monthly payments
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Monthly payment reduction (negative = higher)
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Loan amount needed
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Origination fee
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Total paid keeping current debts
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Total paid with the new loan
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Interest on current debts
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Interest on the new loan
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Months to clear current debts
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Months on the new loan
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How to use this calculator

  1. Enter or choose current debts (one per line: balance, APR %, monthly payment).
  2. Enter or choose consolidation loan APR.
  3. Enter or choose loan term.
  4. Enter or choose origination fee.
  5. The total saving from consolidating updates as you type. Use Copy result or Share to keep it.

Method

Current: each debt paid down month by month at its own payment. New: Loan = Balances ÷ (1 − Fee%); Payment = L × r ÷ (1 − (1 + r)^−n); Saving = Total paid now − Payment × n

L
loan amount
r
loan APR ÷ 12
n
loan term in months
Fee%
origination fee as a share of the loan

Worked example

  1. Current: 10,000 at 1.5% a month paying 300 takes −ln(1 − 150 ÷ 300) ÷ ln(1.015) = 46.6, so 47 months and 13,967.21 in total.
  2. New loan: 10,000 × 0.008333 ÷ (1 − 1.008333^−36) = 322.67 a month.
  3. New total = 322.67 × 36 = 11,616.19.
  4. Saving = 13,967.21 − 11,616.19 = 2,351.02, for 22.67 more a month.

Replacing a $10,000 balance at 18% with a 3-year loan at 10% saves about $2,351, though the payment rises by $22.67 a month.

What the result means

Look at the total saving, not just the monthly payment. A longer loan term can cut the payment while costing more overall. Consolidation also only works if the cleared cards are not run up again.

Assumptions and limits

  • Current debts are paid at the monthly amounts you enter until cleared, with no new borrowing.
  • The origination fee is deducted from the loan proceeds.
  • Both sides use monthly interest at APR ÷ 12.
  • Balance-transfer cards with 0% periods and transfer fees need different maths.
  • Credit score effects and prepayment penalties are not modelled.

Questions

Why can the monthly payment go down but the total cost go up?

Spreading the debt over more months lowers each payment but adds more months of interest. Compare the “total paid” lines.

Is the origination fee worth paying?

It is included in the comparison: the saving shown is after the fee. If it turns negative, the fee or rate is too high to be worth it.

Sources

Please note: This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ.