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Debt Consolidation Calculator

Whether a debt consolidation loan saves money against paying your cards as you do now, once its origination fee is counted.

Paying $450 a month on $15,000 at 22% takes 4 years 4 months and costs $8,394 in interest. A 48-month loan at 12% with a 5% fee ($15,789 borrowed, 14.78% APR) costs $416 a month and $4,958 in interest and fees. It saves $3,436, with a monthly payment $34 lower.

Keep paying as now
4 years 4 months, $8,394 interest
Consolidation loan
$416 a month, $4,958 interest and fee
The loan saves
$3,436
The loan's APR, fee included
14.78%

Credit cards with a 0% intro APR →

$15,000 of card debt at 22%, paid at $450 a month, against a 48-month loan with a 5% fee

Loan rateLoan paymentLoan APR (fee included)Saved against staying
8%$38510.70%$4,892
10%$40012.74%$4,172
12%$41614.78%$3,436
15%$43917.85%$2,301
18%$46420.92%$1,131
22%$49725.01%−$484

The same debt with a 12% loan: how the term changes the cost

TermMonthly paymentInterest and fee
24 months$743$2,838
36 months$524$3,880
48 months$416$4,958
60 months$351$6,074
72 months$309$7,225

How this calculator works

Staying: your balance accrues interest at its APR ÷ 12 and you keep paying the same amount until it is gone.

Consolidating: most lenders take the origination fee out of the loan, so to pay off the whole balance you borrow balance ÷ (1 − fee). The loan is repaid in equal monthly payments over its term. Its cost is every payment minus the debt it paid off, so interest and fee together.

The loan's APR counts the fee, as Regulation Z requires, so it is higher than the rate.

What it assumes

  • You stop using the cards you pay off. Running them up again is the most common way consolidation goes wrong.
  • Loan offers depend on your credit; prequalifying shows your rate without a hard inquiry at many lenders.
  • For several debts, enter the total and an APR weighted by balance.

Questions people ask

Is debt consolidation a good idea?

When the loan's APR is well below what you pay now and you won't run the cards up again, yes. $15,000 at 22% paid at $450 a month costs $8,394 in interest; a 48-month loan at 12% with a 5% fee costs $4,958.

Does a debt consolidation loan hurt your credit?

The application adds a hard inquiry and a new account, a small dip. Paying the cards down usually lowers your credit utilization a lot, which tends to help more.

What is an origination fee?

A one-time charge, often 1% to 10% of the loan, usually taken from the money you receive. It counts in the APR, which is why comparing APRs rather than rates is fairer.

Is a balance transfer better than a consolidation loan?

If you can clear the debt within a 0% intro period, a balance transfer usually costs less: just its 3% to 5% fee. A loan suits bigger balances or longer payoffs, with a fixed end date.

Does a longer loan cost more?

Yes: a lower payment but more interest. At 12% with a 5% fee, the $15,000 above costs $3,880 over 36 months and $7,225 over 72.

Terms explained

Related calculators

  • Balance Transfer CalculatorWhether moving a card balance to a 0% intro APR card saves money once the transfer fee is paid, and the payment that clears it before the 0% ends.
  • Debt Snowball CalculatorPlan paying off several debts at once: the snowball method (smallest balance first) against the avalanche (highest APR first), with the month each debt is gone.
  • APR CalculatorA loan's APR counts its fees as well as its interest rate. Enter the rate, term and upfront fees to see the true yearly cost and the monthly payment.

Sources

Updated by the RateHerald team. The maths is tested against worked examples; report a problem.

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