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Debt Consolidation Calculator

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Find out if a debt consolidation loan is the right choice for you to address financial problems, especially those dealing with credit card debt.

Debt consolidation loans only work if they offer a lower interest rate and monthly payment than what you currently pay on your credit card debt. Our consolidation calculator does the math for you. All you do is enter easily available information.

Example of Consolidation Calculator

The average American household with credit card debt in 2018, owed $15,654 and paid 16.1% interest on it. If you make the minimum payments on those cards, you would be paying $315 a month and it would take 82 months to pay it off.

If you were able to get a 10-year debt consolidation loan for $15,654 at 10% interest, your payment would drop to $207 per month, a savings of $108 each month. If you paid the loan off in 10 years, you would save $1,210 in interest.

If you take the $108 you saved every month using a debt consolidation loan and add it on to your next payment, you would pay off the loan in far less time (65 months) and save far more money ($5,746).

You can manipulate the numbers in any box – changing the monthly payment or interest rate for either credit card or a debt consolidation – to find an affordable payment schedule that works for you.

How to Use a Debt Consolidation Calculator

The starting point for using the debt consolidation loan calculator is to gather all your credit cards and input the amount you owe, the minimum amount due and the interest rate paid on each card.

The Truth in Lending Act requires all that information to be available on every credit card statement.

Next, go online or call a bank or credit union to find out the interest rate and payoff time for a debt consolidation loan. Rates could vary, depending on whether you are approved for a home equity loan, personal loan or zero-percent balance transfer as your debt consolidation loan.

Input the numbers in the appropriate box on this page and hit submit. The consolidation loan calculator will compare costs and give you a clear look at how much money you will save with a debt consolidation loan.

Most people will consolidate their credit cards, but you should include as much of your unsecured debt as you can. Things like unsecured personal loans, store cards, and medical bills can all be consolidated to simplify your payment schedule and reduce the amount you throw away on interest.

Secured debt is debt backed by collateral like a car or a home. These debts can often be refinanced for a lower interest rate, but they cannot be consolidated like unsecured debts. Don’t include your secured debt (car loan, mortgage) into the calculation.

You should know your credit score for the most accurate estimate of how much you can save. Many banks and credit card companies will let you check your credit score for free, so do it often. Checking your credit score yourself will not harm it.

Estimate Your Debt Consolidation Savings

For the debt consolidation loan calculator to work, you need certain information. You need to know the APR of your debt consolidation loan and the loan term or number of years in which you will repay it.

Next, it will ask for information relating to your current debts. Fill in the balance, monthly payment, and yearly interest rate of each loan you plan to consolidate. This may include credit cards, auto loans or other forms of secured and unsecured debt.

After hitting submit, your results will show up in a section below the calculator.

Benefits and Risk of Debt Consolidation

Debt consolidation will simplify your life, as far as your debts are concerned, and may even offer lower interest rates.

If you’ve ever been a server, you know how much easier your life gets when the table pays with one check instead of five or six credit cards. Debt consolidation is a good option if you feel overwhelmed by the sheer number of bills you have to juggle every month.

Nothing feels worse than missing a payment because you forgot it, especially when you actually have the money to pay for it. You didn’t mean to pay late, but that won’t stop your creditors from charging late fees. Consolidating debts minimizes your likelihood of missing payments.

A lower interest rate is another tempting reason to consolidate debt. It could save you thousands of dollars, especially if you ramp up the repayment process.

Despite all the positives, debt consolidation is not a cure-all for your money problems. You could end up paying more for your loans. This may happen if you lower your monthly payments or extend your loan terms without lowering your interest rate. You’ll owe the same amount, but you will take longer to pay it off, which gives interest more time to build.

However, lowering your monthly payment amount may be necessary to stay afloat. If you’re going through financial turmoil, it may be better to take on more affordable payments now, knowing it will cost you in the future. You have to weigh the pros and cons and decide what works best for you and your family. Not all debt consolidation loans come with the same risk.

The risk varies depending on the type of consolidation you go with. For instance, consolidating your debt with a secured loan will put your collateral at risk. Collateral could be your home, car, or retirement account; at any rate, it’s something valuable that you should only be risking as a last resort. On the flipside, consolidating with a personal loan will put your credit at risk, but your home and car will be safe from seizure.

Ways to Consolidate Debt

Debt consolidation allows people to simplify their debts, save money, or lower their monthly payments. There are a few ways to consolidate debt, however, the one that’s best for you will depend largely on your income and credit score, but also on your debt-to-income ratio (DTI) and access to collateral.

Here are four methods for consolidating debt:

Debt Management Plan

A debt management plan (DMP) consolidates your eligible debts into a single payment with the aim of paying it off in 3 to 5 years. DMP agencies work with card companies to drop your payments to levels you can afford and joining a plan doesn’t require taking out another loan. There’s no credit score requirement for a DMP, which makes it a good option for people struggling to qualify for other debt consolidation methods.

Personal Loan

Another option is to take out a personal loan for debt consolidation, often called a debt consolidation loan. This could lower your interest rates; however, the best rates are reserved for consumers with the best credit.

If you have bad credit, your rate may be the same as what you pay now or higher. Nor is it a guarantee that you will be approved at all. Many online lenders have prequalification options that let you know if you’ve been approved while showing you potential rates without a hard credit check. This can help preserve your credit score if you plan to do some (highly recommended) rate shopping.

Home Equity Consolidation Loan

You can consolidate your debts with a home equity loan. This is often called a second mortgage. Usually, the max loan amount is limited to 85% of your home’s market value. So, if your home is worth $200,000, the most you could borrow would be $170,000. This gives you the potential for high loan amounts along with even lower interest rates.

This option has one obvious pitfall, if you default on the loan you could lose your home. It’s not worth the risk if you’re just dealing with a few thousand dollars in credit card debt. Even those dealing with higher amounts of debt should consider consolidation options that don’t require the use of collateral before looking to home equity loans for consolidation.

Borrow from your 401k

You can borrow from your 401k to consolidate debt. Federal law limits you to $50,000 or 50% of the amount in your account.

According to Vanguard’s 2019 How America Saves report, 13% of 401k savers have an outstanding loan, with an average balance of $9,900.

The loan is tax-free with no early-withdrawal penalty, however, if you lose or leave your job, you have to repay the money, possibly as early as the next Tax Day. It’s rarely a good idea to disrupt your 401k because doing so can derail your retirement prospects in unpredictable ways.

Definition of Debt Consolidation Terms

Below is a brief definition of each of the terms used by’s Debt Consolidation Calculator to help you better understand why using a debt consolidation loan could save you time and money.

Each term is broken down in the category it appears under.

Consolidated Loan Information

Annual Percentage Rate: Common term that describes the interest rate charged for borrowing money. It represents the actual cost of the money over the term of the loan.

Number of Years: Length of time you expect it will take to pay off your debt consolidation loan.

Current Debt Information

Balance: The amount owed.

Monthly Payment: Minimum payment expected by credit card company. Usually calculated at two percent of balance owed.

Yearly Rate: Same as annual percentage rate.

Terms under Current Debt Analysis

Total debt balance: Amount owed.

Total monthly payment: Amount owed each month.

Total remaining interest to be paid: Amount of interest paid over the life of the loan.

Total number of payments remaining: Number of months left to pay off the balance owed.

Consolidated Loan Analysis

Proposed loan amount: The amount you would borrow to pay off all credit card bills.

Required monthly payment: The amount you would pay each month for the loan.

Total remaining interest to be paid: The amount of interest paid when the loan is paid off.

Total number of payments remaining: Number of monthly payments you must make on the loan.

If You Apply Your Monthly Savings to the New Loan

Monthly savings amount: Money saved each month by using a debt consolidation loan versus paying on the credit card terms.

Total remaining interest to be paid: Amount of interest you would pay IF you add amount you save each month to your regular monthly payment. For example: If your monthly loan payment was $207 and you saved $108 each month, add the two together to make a payment of $315 each month. This allows you to pay off the loan much faster and save much more money.

Total number of payments remaining: Number of payments you would make to retire the loan, if you chose to add the monthly savings and monthly payment together. So, instead of making 120 payments for your 10-year loan, you would pay it off in 66 months, or just about half the time.

About The Author

Bents Dulcio

Bents Dulcio writes with a humble, field-level view on personal finance. He learned how to cut financial corners while acquiring a B.S. degree in Political Science at Florida State University. Bents has experience with student loans, affordable housing, budgeting to include an auto loan and other personal finance matters that greet all Millennials when they graduate. He has a prodigious appetite for reading, which he helps feed with writing from Scottish philosopher Adam Smith, the “Father of Capitalism.” Bents writing also has been published by JPMorgan Chase, TheSimpleDollar and


  1. N.A. (2019 June) How America Saves. Retrieved from:
  2. N.A. (ND) Home Equity Loans and Credit Lines. Retrieved from: