See if consolidating your debts into a single loan could save you money on interest and simplify payments
By consolidating at 8% APR, you could save $7,413 in interest and pay off your debt 13 months sooner.
Debt consolidation combines several debts — typically credit cards — into a single loan with one monthly payment. This calculator compares your current debts against a consolidation loan and shows whether the switch actually saves money once the new rate, term, and any fees are counted.
Consolidation helps when the new loan's rate is meaningfully lower than the weighted average rate of your existing debts. It can backfire when a longer term stretches payments out so far that total interest rises even at a lower rate, or when origination fees eat the savings.
When the new loan's APR is clearly below the average rate of the debts it replaces, the term isn't dramatically longer, and fees are modest. It's most effective for high-rate credit card debt moved to a lower-rate personal loan with a fixed payoff date.
There's usually a small, temporary dip from the hard inquiry and the new account. Over time, scores often improve because credit card utilization drops and payment history stays consistent with a single predictable payment.
Secured loans offer lower rates, but they convert unsecured debt into debt backed by your home. If you later can't pay, the consequences escalate from collection calls to foreclosure risk. Be cautious, and only use home equity if your budget has real slack.
Term length. Stretching $20,000 of debt from 3 remaining years to a 7-year loan can raise total interest even if the APR drops several points, because interest accrues over many more months. Match the new term to your current payoff timeline when you can.
Consolidation can cut your interest rate in half — or quietly cost you more. A clear framework for when a consolidation loan beats paying cards directly.