Debt Consolidation Calculator
Compare your current debts with a consolidation loan to see if combining them saves you money.
What is Debt Consolidation?
Debt consolidation combines multiple debts into a single loan with one monthly payment — ideally at a lower interest rate. It simplifies payments and can reduce total interest paid.
Your Current Debts
| Debt Name | Balance ($) | Interest Rate (%) | Min. Payment ($) | Monthly Interest | Remove |
|---|---|---|---|---|---|
| Total | $0 | 0% | $0 | $0 |
Consolidation Loan
Auto-filled from total debt balance above
New Monthly Payment
$0
Single consolidated payment
Enter your debts to see recommendation
Payment Comparison
Interest Comparison
Payoff Timeline
💡 Consolidation Tips
- • Only consolidate if new rate is lower than current avg.
- • Avoid using credit cards again after consolidation
- • Check for prepayment penalties on existing loans
- • Balance transfer cards offer 0% intro APR (12–21 months)
- • Home equity loans offer lowest rates (secured)
Quick Answer
Consolidating $16,000 in credit card debt at a weighted average rate of 20% into a personal loan at 10% over 36 months can save thousands in interest while simplifying your payments into one predictable monthly bill. Add your own debts above for a personalized comparison.
Consolidation Loan Amortization
| Month | Payment | Principal | Interest | Balance |
|---|
What is Debt Consolidation?
Debt consolidation combines multiple debts, such as credit cards, personal loans, and medical bills, into a single loan with one monthly payment, ideally at a lower interest rate than your current average. This simplifies your finances into one predictable payment and can significantly reduce total interest paid, provided the new rate is genuinely lower than your existing debts.
How to Use the Debt Consolidation Calculator Step by Step
- Add each of your current debts — including balance, interest rate, and minimum payment for every credit card or loan.
- Review your weighted average rate — automatically calculated based on your debt balances and rates.
- Enter the new consolidation loan rate — from a quote or pre-approval you've received.
- Select your new loan term — typically 2 to 7 years for personal loan consolidation.
- Add any origination fee — a one-time charge some lenders apply.
- Review your recommendation — see your monthly savings, interest saved, and whether consolidation makes financial sense for you.
Debt Consolidation Rates in USA 2026
Debt consolidation loan rates in 2026 vary by credit score and lender, but even borrowers with average credit can often secure rates significantly lower than typical credit card APRs of 20% to 30%.
| Consolidation Method | Average Rate (2026) |
|---|---|
| Personal Loan (Excellent Credit) | 7% – 12% |
| Personal Loan (Good Credit) | 12% – 18% |
| Balance Transfer Card (Intro APR) | 0% for 12 – 21 months |
| Home Equity Loan/HELOC | 7.5% – 9.5% |
| Average Credit Card APR | 20% – 30% |
Rates are illustrative averages based on national market conditions in 2026 and vary by lender and credit profile.
Types of Debt Consolidation
- Personal Loan: Fixed rate, fixed term, best for consolidating credit card debt into one predictable payment.
- Balance Transfer Card: Offers 0% intro APR for 12-21 months, ideal for smaller balances you can pay off before the promotional period ends.
- Home Equity Loan/HELOC: Offers the lowest rates since secured by your home, but risks your home as collateral.
- 401(k) Loan: No credit check required, but risks your retirement savings and has repayment complications if you leave your job.
- Debt Management Plan: Through nonprofit credit counseling agencies, often negotiating lower rates with creditors directly.
Debt Consolidation Calculator FAQs
Is debt consolidation a good idea for credit card debt?
Yes, debt consolidation is often beneficial for credit card debt since cards typically charge 20% to 30% APR, while a personal loan or balance transfer card may offer rates of 7% to 18%, potentially saving thousands in interest while simplifying repayment into one monthly bill.
Will debt consolidation hurt my credit score?
Debt consolidation may cause a small, temporary dip in your credit score due to the hard credit inquiry and new account, but paying down revolving credit card balances typically improves your credit utilization ratio, often leading to score improvement within a few months.
What credit score do I need to qualify for a consolidation loan?
Most lenders require a minimum credit score of 600-640 for debt consolidation loans, though the best rates are reserved for scores of 700 or higher. Some lenders specialize in fair-credit consolidation loans, though rates will be higher for borrowers below 650.
Should I close my credit cards after consolidating debt?
Generally, it's better to keep credit card accounts open with a zero balance rather than closing them, since closing accounts can reduce your available credit and increase your utilization ratio, potentially hurting your credit score. Just avoid using them to accumulate new debt.
When NOT to Consolidate Your Debt
- Higher new rate: If the consolidation loan rate is higher than your current average rate, you'll pay more, not less.
- Continued credit card use: If you keep spending on cards after consolidating, you risk accumulating new debt on top of the consolidation loan.
- Longer loan term increases total cost: A much longer repayment term can increase total interest paid even at a lower rate.
- High fees offset savings: Large origination fees can eliminate the benefit of a slightly lower interest rate.
Debt Consolidation vs Debt Settlement
| Debt Consolidation | Debt Settlement | |
|---|---|---|
| Credit Impact | Minor, temporary | Significant, long-lasting |
| Pays Full Balance | Yes | No, negotiated reduction |
| Best For | Manageable debt, good credit | Severe hardship, last resort |
Disclaimer: This calculator provides estimates only and does not constitute financial advice. Consider consulting a certified financial counselor or nonprofit credit counseling agency before making major debt decisions.