Debt Consolidation Calculator

• Compares total interest under your current debts against a new consolidation loan side by side.
• Calculates your true balance-weighted average current interest rate, not just a guess.
• Flags when a lower payment is projected to actually cost more in total interest.
• Add as many debts as you're considering rolling into one loan.

How to use this calculator

List each debt you're considering consolidating — its balance, interest rate, and current minimum payment. Then enter the terms of the new consolidation loan you're considering: its rate, its term, and any origination fee. The calculator compares the total interest of continuing to pay the current debts at their minimums against the new consolidated loan.

How the comparison works

The current path is modelled as paying every listed debt at its stated minimum payment, with no extra budget and no rolling a paid-off debt's minimum into another — a "if nothing changes" baseline. The new loan is modelled as a standard fixed-rate amortizing loan for the full consolidated balance (plus any fees rolled in), over the term you select.

Blended current rate = Σ(balance × rate) ÷ total balance

That balance-weighted average is the fairest single number to compare against the new loan's rate — a simple average of the rates would overweight a small balance at a high rate.

A worked example

Two credit cards at 24% and 22% plus a personal loan at 14%, totaling $13,500, have a balance-weighted average rate of about 20.5%. Consolidating into a single 3-year loan at 12% produces a new payment of roughly $448 a month — compare that, and the total interest on each path, against what's being paid today across three separate minimums.

When consolidation actually helps

Consolidation is a straightforwardly good trade when the new rate is meaningfully lower than the current balance-weighted rate and the term isn't stretched so much further that the extra time erases the rate savings. It's a less clear trade — even if the monthly payment drops — when the new rate isn't much lower, or when a short remaining payoff on the current debts gets replaced with a much longer new term.

Consolidation is also valuable for reasons beyond the interest math: fewer due dates and one payment to track can meaningfully reduce the risk of a missed payment, which has its own cost through late fees and credit score damage that this calculator doesn't attempt to quantify.

Assumptions and limitations

• The "current path" assumes minimums only. If you're actually paying more than the minimums today, or following a debt snowball or avalanche strategy, the real current-path payoff will be faster and cheaper than what's shown here — see the Debt Snowball or Debt Avalanche calculators for that comparison instead.
• No impact on credit score is modelled. Consolidation can affect credit scores in both directions — closing old accounts, a new hard inquiry, and a lower credit utilization ratio all pull in different directions.
• Assumes the full balance is actually transferred. A partial consolidation, or fees not fully captured in the amount entered, would change the real result.

Common mistakes

Judging only by the new monthly payment. A lower payment achieved mostly by a longer term can cost more in total interest — always compare the total interest figures, not just the payment.

Running the old balances back up. The single most common way consolidation backfires: the old credit cards get paid to zero, then used again, leaving both the new consolidation payment and fresh balances on the old accounts.

Not shopping the new loan's rate. The rate offered on a debt consolidation loan or balance transfer varies significantly by lender and by credit profile — the math here is only as good as the real rate actually available.

Frequently asked questions