Debt Consolidation Calculator
Enter your existing debts, then enter the terms of a consolidation loan to see whether it truly saves money. The calculator runs both scenarios side-by-side and flags the term trap: a lower interest rate does not guarantee a lower lifetime cost if the new term is significantly longer.
Existing debts
Consolidation loan
Consolidation payment
$265.71/mo
vs 3y term on $8,000 total
Existing min payments
$250.00/mo
payoff in 4y 2m
Monthly savings
$15.71
per month vs current
Existing total interest
$3,375
blended 19.25% APR
Consolidation total interest
$1,566
at 12% APR
Interest saved
+$1,809
Pay off 1y 2m sooner
Balance over time
Consolidation schedule (yearly)
| Year | Cumul. interest | Balance |
|---|---|---|
| 1 | $833 | $5,645 |
| 2 | $1,368 | $2,991 |
| 3 | $1,566 | $0 |
How it works
Your existing debts are each simulated independently using only their minimum payment. Each month interest accrues on the remaining balance, the minimum payment covers it (interest first, then principal), and the process repeats until the balance reaches zero. The totals — months to payoff and interest paid — are summed across all debts to produce the baseline.
The consolidation loan is calculated with the standard fixed-rate amortization formula: monthly payment = principal × (r / (1 − (1 + r)^−n)), where r is the monthly rate and n is the term in months. The full amortization runs to produce total interest paid on the new single loan.
The side-by-side comparison shows monthly payment delta, total interest delta, and payoff-time delta. When the consolidation loan's total interest exceeds the existing minimum-payment totals — even at a lower APR — the calculator surfaces a term-trap warning so you can see exactly how much more the extended term costs before you decide.
Frequently asked questions
Can a lower interest rate actually cost me more?+
Yes. Interest rate and total interest paid are not the same thing. If a consolidation loan stretches your repayment from 3 years to 10 years, even a rate that is several percentage points lower can produce a higher total interest bill. The calculator's term-trap flag fires whenever this is the case, showing the exact extra cost so you can decide whether the lower monthly payment is worth it. This is not financial advice — consult a qualified adviser before taking on any new loan.
What does the blended APR figure mean?+
Blended APR is the balance-weighted average interest rate across all your existing debts. If you owe $5,000 at 20% and $3,000 at 18%, the blended rate is (5,000 × 20 + 3,000 × 18) ÷ 8,000 = 19.25%. A consolidation loan with a rate below this blended figure does charge less interest per dollar of outstanding balance — but only if the term is not extended too far.
Are there costs beyond interest to consider?+
Yes. Many consolidation loans charge origination fees (typically 1–8% of the loan amount). This calculator focuses on interest cost comparisons using the terms you enter; it does not model origination fees or prepayment penalties. Factor those into your APR comparison manually — a loan advertised at a lower rate but with a large origination fee may carry a higher effective APR than it appears.