Debt Consolidation Calculator
Combine several debts into a single payment and see the possible savings.
Tip: Consolidation pays off only if the new rate is lower than the weighted average of your current debts.
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About this digital tool
The debt consolidation calculator combines several debts, such as credit cards, small loans and borrowings, into a single loan with one monthly payment. Add each debt with its balance, rate and current payment, then the rate and term of the new consolidation loan. The tool compares the total cost and the monthly payment before and after, and shows whether you save money.
Consolidation makes sense when the new rate is lower than the weighted average of your current debts and the costs of the new loan are reasonable. Be careful: a longer term may lower the payment but raise total interest. The result is an estimate; check the real terms and fees with the bank.
How to use
- Add your current debts with the balance, rate and payment.
- Enter the new rate and the term of the consolidation loan.
- Compare the payment, the total interest and the saving.
Frequently asked questions
When is debt consolidation worthwhile?
When the new rate is lower than the average of your current debts and it doesn't extend the term much. If it extends the term, you may pay more total interest.
What is debt consolidation?
It is taking out a new loan to pay off several existing debts, so that you pay only one payment, ideally at a lower rate. It aims at simplicity and interest savings.
When is consolidation worth it?
When the new rate is lower than the average rate of your debts, setup costs are small and the term is not extended too much. The calculator shows the total saving.
What risks does consolidation have?
You may pay more interest overall if you extend the term, and if you use the paid-off cards again you can build up new debt. Discipline is essential.