Debt Consolidation Calculator: Compare Multiple Debts vs One Loan
When you carry several debts at different interest rates and different lenders, it can be hard to see the total picture. This calculator puts all your debts on one screen and shows exactly what it would cost to consolidate them into a single loan. Enter up to five debts with their outstanding balances, annual interest rates, and current minimum monthly payments. Then enter the terms of a consolidation loan you have been offered: the interest rate and the repayment term in months. The calculator adds up your existing total monthly obligations and simulates the total interest you would pay by continuing with minimum payments on each debt separately. It then calculates the standard amortizing payment on the consolidation loan and the total interest you would pay on that loan. The difference in monthly payment and total interest cost gives you a clear answer on whether consolidation makes sense financially. Note that a longer loan term can reduce your monthly payment while increasing total interest, so look at both figures before deciding. This tool does not include origination fees; subtract any upfront loan fee from the savings figure to get a true net benefit.
Formulas
Combined balance = sum of all debt balances
Current total monthly = sum of minimum payments (non-zero debts)
Consolidated monthly payment = balance x monthly_rate / (1 - (1 + monthly_rate)^(-term))
where monthly_rate = consolidation APR / 12 / 100
Current total interest = sum of interest paid on each debt simulated at its minimum payment
Consolidated total interest = (consolidated monthly payment x term) - combined balance
Monthly savings = current total monthly - consolidated monthly payment
Interest savings = current total interest - consolidated total interest
How to use this calculator
- Enter up to five debts: the outstanding balance, the annual interest rate, and the current minimum monthly payment for each. Leave unused rows at zero.
- Enter the APR and term (in months) of the consolidation loan you are considering. A 60-month term is five years; a 36-month term is three years.
- Read the combined balance and current total monthly payment to confirm the inputs are correct.
- Compare the consolidated monthly payment with the current total monthly payment to see the monthly cashflow change.
- Compare total interest on current debts versus the consolidated loan to see whether you save or spend more over the full repayment period.
- Subtract any loan origination fee from the interest savings figure to calculate the true net benefit of consolidation.
Frequently asked questions
What is debt consolidation?
Debt consolidation means taking out a single new loan to pay off multiple debts. The goal is to simplify payments (one instead of many) and ideally lower the blended interest rate. Common vehicles are personal loans, balance transfer credit cards (often 0% promotional APR), and home equity loans or lines of credit.
Will consolidation save me money?
It depends on the new rate relative to your current rates. If your new loan rate is lower than the weighted average rate on your existing debts, you will save on interest. If it is higher, you may still benefit from lower monthly payments (by extending the term) but pay more interest overall.
What is the difference between debt consolidation and debt settlement?
Consolidation involves taking a new loan to pay creditors in full. Debt settlement involves negotiating with creditors to accept less than the full balance. Settlement damages your credit score and can have tax consequences (forgiven debt may be taxable income). Consolidation, done responsibly, does not damage your credit.
Does consolidation affect my credit score?
Applying for a new loan creates a hard inquiry, which may temporarily lower your score by a few points. Closing old accounts can reduce your average account age and total credit limit, affecting utilization. However, if consolidation leads to lower balances and on-time payments, the long-term effect on your score is typically positive.
What are the risks of using a home equity loan to consolidate debt?
A home equity loan converts unsecured debt (credit cards) into secured debt backed by your home. If you default, you risk foreclosure. This trade-off is only worthwhile if you can commit to not re-accumulating unsecured debt after the consolidation.
Official sources
- CFPB: Debt consolidation: consumerfinance.gov.
- FTC: Coping with Debt: consumer.ftc.gov.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.