Debt Consolidation Calculator
This calculator helps you determine if consolidating your debts with a single loan could save you money by comparing your current debt payments with a proposed consolidation loan.
Current Debts
| Debt name | Remaining balance | Monthly payment | Interest rate |
|---|---|---|---|
| % | |||
| % | |||
| % | |||
| % | |||
| % | |||
| % |
Consolidation Loan
Consolidation Results
| Current Debts | Consolidation Loan | Difference | |
|---|---|---|---|
| Total amount | $24,000.00 | $25,000.00 | +$1,000.00 |
| Monthly payment | $630.00 | $543.00 | -$87.00 |
| Total interest | $8,450.00 | $7,580.00 | -$870.00 |
| Payoff time | 5 years 3 months | 5 years | -3 months |
Payment Schedule Comparison
| Month | Current Payment | Loan Payment | Savings |
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About the Debt Consolidation Calculator
This debt consolidation calculator helps you determine whether combining multiple debts into a single loan could save you money. By comparing your current debt situation with a proposed consolidation loan, you can make an informed decision about debt consolidation.
How Debt Consolidation Works
Debt consolidation involves taking out a new loan to pay off multiple existing debts. This can potentially:
- Lower your overall interest rate
- Reduce your monthly payment
- Simplify your finances with one payment
- Help you pay off debt faster
When Consolidation Makes Sense
Debt consolidation is most beneficial when:
- You can get a lower interest rate than your current debts
- The loan term doesn't extend your payoff date too far
- The fees don't outweigh the interest savings
- You're committed to not accumulating new debt
Potential Risks
Be aware of potential downsides:
- Longer loan terms may mean paying more interest overall
- Some consolidation loans have fees or prepayment penalties
- If you use home equity, you risk losing your home if you can't pay
- Without changing spending habits, you may end up with new debt
Key Terms Explained
Loan Amount: The total amount you're borrowing to consolidate your debts.
Interest Rate: The annual cost of the loan expressed as a percentage of the loan amount.
Loan Term: The length of time you have to repay the loan.
Loan Fee/Points: Upfront fees charged by the lender, expressed as a percentage of the loan amount.
Monthly Payment: The fixed amount you'll pay each month toward the loan.
Benefits of Using This Calculator
Compare Scenarios: See exactly how much you could save with consolidation.
Understand Tradeoffs: Evaluate whether lower monthly payments are worth potentially longer terms.
Make Informed Decisions: Have concrete numbers to help choose the best debt repayment strategy.
Visualize Savings: The chart and tables help you see the long-term impact of consolidation.
Tips for Successful Debt Consolidation
Shop Around: Compare rates from multiple lenders to get the best deal.
Consider All Costs: Factor in fees when calculating potential savings.
Avoid Extending Terms: Try to keep the loan term similar to your current payoff timeline.
Change Habits: Use consolidation as an opportunity to improve your financial habits.
Check Your Credit: Better credit scores qualify for lower interest rates.