How this calculator works
A consolidation loan pays off several debts and replaces them with one payment at one rate. This comparison runs your current debts forward at their own rates and required payments, then runs an equal-payment loan for the same total balance at the new rate and term, adding the upfront fee to the new side. The new loan usually lowers the monthly payment partly by spreading the balance over a longer period, so a lower rate does not always mean lower total cost. Only the arithmetic is shown; eligibility, security and whether any debt is excluded remain with the lender.
Formula
Current plan: each debt is simulated at balance × rate / 12 with its own payment until it clears. New loan: payment A = P × i / (1 - (1 + i)^(-n)) where i = new rate / 12 and n is the new term. New total cost = n × A + fee. Monthly change = current payment - A. Total cost change = current interest - (new interest + fee).
Worked example
Consolidating $2,000 at 4.9%, $6,000 at 19.99% and $15,000 at 7.5% into a $23,000 loan at 11.5% over 60 months costs $505.83 a month, against $600 of current payments. The current plan finishes in 67 months with $6,570.74 of interest. The new loan adds $7,349.80 of interest, or $7,649.80 with a $300 fee, so the monthly payment falls by $94.17 while total cost rises by $1,079.06. The change is negative in the table because it is measured as the current cost minus the new cost.
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Frequently asked questions
Is a lower monthly payment always a good result?
No. A longer term lowers the payment while adding interest. Compare the total cost figures as well as the monthly amount, and remember that the fee is paid once at the start.
Does the new loan have to cover every debt?
No. Leave out any debt you want to keep separate by setting its balance to zero, or enter only the balances you plan to consolidate.
What happens to the freed monthly money?
The comparison assumes the new payment is the only payment. If you keep paying the old amount, or add the difference as an extra payment, the new loan clears faster and the cost gap narrows.
Does a consolidation loan affect credit?
It can. A new account and a credit inquiry usually lower a score temporarily, while lower utilization on the repaid cards can help. This calculator does not model credit scores.