Debt Consolidation Savings Calculator
Compare the interest on several debts with one consolidation loan using balance, rate and term for each, with a worked three-debt example and its caveats.
Results · USD
Estimated interest saved
New monthly payment
- Old total interest
- $6,836.67
- New loan interest
- $5,894.33
- Sum of old payments
- $779.28
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Educational estimates · not financial advice · free, no signup
How this was calculated
Compare sum of remaining interest on each debt vs interest on a single consolidating loan. Amortizing payment model; fees ignored.
Want more detail? Full formula notes & FAQs ↓
Detailed guide
What it is, how to use it, how to read the numbers, common mistakes, a worked example, formulas, and FAQs.
What this calculator is
Debt consolidation replaces several loans or cards with one new loan, ideally with a lower rate or a payment you can manage. This calculator takes each debt as balance, annual rate and term in months, estimates the interest on each, and compares the total with a single loan at the rate and term you enter. It is an amortizing-loan model that ignores fees, credit score effects and changes in your behaviour. The key trap is term length: stretching debt over a longer term lowers the payment but can increase total interest even at a lower rate, so the monthly saving and the interest saving are separate numbers to examine.
When to use / who it helps
- You are considering a personal loan to pay off several debts.
- You want to see whether a quoted consolidation rate really saves interest.
- You are comparing a longer consolidation term with your current terms.
- You want a single monthly payment figure.
- You are checking a lender's marketing claims.
How to use
Steps
- Enter each debt on its own line as balance, rate and months remaining.
- Enter the rate of the consolidation loan.
- Enter the term of the new loan in months.
- Read the estimated interest saved.
- Compare the old payments total with the new payment.
- Add any origination fee yourself and subtract it from the savings.
How to interpret results
- Interest saved is the old interest total minus the new loan's interest.
- A lower payment does not always mean less interest.
- Fees reduce the true savings.
- Your credit may affect the rate you are offered.
- Closing old cards can affect credit scores.
Common mistakes & gotchas
- Ignoring origination fees.
- Extending the term and assuming lower payments mean savings.
- Running up the old cards again after consolidating.
- Entering annual rates as monthly ones.
- Not entering the remaining term for each debt.
Worked example
Worked example — three debts into one 11% loan over 48 months
- Debts: $8,000 at 22% over 36 months, $4,500 at 18% over 24, $12,000 at 9% over 60.
- Payments are about $305.52, $224.66 and $249.10, a total of $779.28 a month, with total interest of about $6,836.67.
- One $24,500 loan at 11% over 48 months costs about $633.22 a month, with interest of about $5,894.33.
- Saving: 6,836.67 − 5,894.33 ≈ $942.33, minus any fee.
Result: Consolidating saves about $942 of interest and lowers the monthly payment from $779.28 to $633.22 before fees.
To load the form's own demo values, tap Try example above the Calculate button.
How to calculate / formula
Compare sum of remaining interest on each debt vs interest on a single consolidating loan. Amortizing payment model; fees ignored.
Frequently asked questions
Does consolidation always save money?
No. It depends on the new rate, the term and any fees.
Why is a lower monthly payment not always better?
A longer term can increase total interest.
Are fees included?
No. Subtract them from the estimated savings.
What is a good consolidation rate?
One meaningfully below the weighted rate of your current debts.
Will consolidation affect my credit?
It may, through inquiries and changes in account mix.
How do I enter several debts?
Put each debt on a separate line: balance, rate, months.