Debt Consolidation Calculator
Enter your current debts and a proposed consolidation loan. We compare them against the best plausible payoff of your existing debts (avalanche order) and tell you whether consolidating actually saves money — origination fees included.
Lower total interest plus avoided fees outweighs the cost of the consolidation loan. Consolidation finishes sooner by 10 months.
- Sum of minimums
- $410.00
- Payoff date
- March 2031
- Months to payoff
- 58
- Total interest
- $7,591
- Total cost
- $7,591
- Fixed monthly payment
- $401.97
- Payoff date
- May 2030
- Months to payoff
- 48
- Total interest
- $3,595
- Total cost
- $3,595
How the comparison works
For the "keep current debts" side of the comparison, we simulate paying them off using the debt avalanche method — paying the minimum on every debt each month and funneling everything extra into the highest-APR debt until it's cleared, then the next-highest. Avalanche minimizes total interest paid, so it represents the best-plausible-outcome of self-funded payoff. This is a deliberately favorable baseline for your current debts — if consolidation can't beat that, it definitely can't beat looser real-world payoff order.
For the consolidation side, we compute the monthly payment required to retire the borrowed principal over your specified term at the consolidation APR. Origination fees are added to the principal you borrow (since they're typically deducted from the disbursement — you have to borrow enough extra to net out the amount needed to pay off the old debts).
The break-even month tells you how long it takes for the consolidation's interest savings to recover the origination fee. If you pay the consolidation loan off before that month, you came out behind. If you pay through it to the end of the term, the verdict at the top reflects the final tally.
When consolidation makes sense
- Multiple high-APR credit cards. A weighted average above ~15% APR can typically be improved by a fixed-rate personal loan if your credit score supports a competitive offer.
- Cash-flow stability matters. Replacing five variable minimums with one fixed monthly payment makes budgeting easier. The total cost might be similar, but predictability is real value.
- You've fixed the underlying habit. Consolidation only helps if you don't re-rack up the old cards afterward. If credit cards were a symptom of overspending that hasn't been addressed, consolidation will probably make things worse a year from now.
When to walk away
- The new APR is close to your weighted average. After fees, you'll likely lose money.
- The origination fee is over ~5% and the savings are small. The break-even point pushes deep into the loan and one unexpected event (refinance, payoff, default) erases the savings.
- The term is dramatically longer. Consolidating 7 years of debt into a 10-year loan often costs more in total interest even at a lower rate.
- It involves your home. A home equity loan or HELOC consolidation turns unsecured debt into secured debt — miss payments and you can lose your house. The math may favor it; the risk profile rarely does.
Frequently asked questions
Does debt consolidation actually save money?
Sometimes. The math is: take your current debts, calculate the total interest you'd pay under the best plausible payoff strategy (avalanche — highest APR first), then compare against the consolidation loan's total interest plus any origination fee. Consolidation wins when (a) your new APR is meaningfully lower than your weighted-average current APR, and (b) the term isn't extended so far that lower-rate-times-more-months exceeds higher-rate-times-fewer-months. This calculator runs both numbers side by side.
How do origination fees factor in?
Personal-loan and consolidation-loan origination fees are typically 1-8% of the loan amount and deducted from the disbursement — meaning you receive less cash than the stated loan amount. This calculator handles that correctly: if you have $15,000 in debt and a 5% fee, you actually need to borrow about $15,790 so the net disbursement covers all your debts. The break-even point tells you how many months it takes for the consolidation's interest savings to exceed the fee.
Why does the calculator use avalanche as the baseline?
The avalanche strategy (pay highest-APR debt first, minimums on the rest) produces the lowest total interest among purely-self-funded payoff strategies — so it's the best-plausible-outcome baseline to test consolidation against. If avalanche on your current debts costs less than the consolidation loan, then consolidation is by definition the wrong move. We deliberately don't use the snowball baseline because it pays more interest on average, which would make consolidation look better than it actually is.
When does consolidation hurt?
Three common traps: (1) the new term is longer than your effective avalanche timeline, so even at a lower rate you pay more interest over more months; (2) the origination fee is too high to ever recover through interest savings; (3) you free up monthly cash flow and use it to keep spending instead of staying disciplined, ending up with the consolidation loan AND new credit card balances. The calculator catches the first two — the third is on you.
What's the credit score impact of consolidating?
Short-term: small dip from the hard credit inquiry and the new account lowering your average account age. Medium-term: improvement if you pay your old credit cards down to zero and keep them open (boosts your utilization ratio, which is a major scoring factor). Long-term: improvement from the cleaner payment history if you stick to the consolidation plan. Closing old paid-off credit cards after consolidation will hurt your score by lowering available credit — leave them open with a $0 balance.
Balance-transfer cards vs personal-loan consolidation — which is better?
Different products. Balance-transfer cards offer a 0% intro APR for 12-21 months, then jump to standard credit card rates (15-25%). They work well if you can pay off the balance entirely during the intro period; they're a trap if you can't, because you're stuck with high-rate revolving debt again. Personal-loan consolidation locks in a fixed rate over a fixed term — no intro/post-intro cliff, but no 0% honeymoon either. This calculator models the personal-loan style. For balance transfers, the calculation is essentially 'will I pay this off before the intro APR ends.'
Related debt tools
Debt Avalanche Calculator
The baseline this tool compares consolidation against.
Debt Snowball Calculator
Same multi-debt setup, behavioral payoff order.
Loan Payoff Date Calculator
Generic single-loan payoff math.
Extra Payment Savings
Coming soonQuantify the effect of adding $X/month to any loan.
Estimates are educational only. The calculator assumes fixed APRs with monthly compounding for both your current debts and the consolidation loan, end-of-month payments, and that origination fees are deducted from the consolidation loan disbursement. This tool doesn't model balance-transfer credit cards (different product type) or actual loan offers — for that you'll need to apply with a lender.