Use the calculator above to estimate your potential savings by consolidating credit card debt. Enter your current balances, interest rates, and desired loan term to see your projected monthly payment, total interest paid, and payoff timeline. The results help compare your current debt costs against a consolidated loan.

How Debt Consolidation Savings Are Calculated

Debt consolidation math compares two scenarios: your current high-interest debts versus a single loan. The formula considers:

• Total principal: Sum of all credit card balances you’re consolidating
• Weighted interest rate: Average of your current rates based on balance sizes
• New loan terms: Interest rate (typically 7-24% APR) and repayment period (2-7 years)

Savings occur when the new loan’s APR is lower than your current weighted rate, or when shortening the repayment term reduces total interest despite similar rates.

What Affects Your Payment

• Credit score: Scores below 650 may qualify for rates above 18%
• Loan term: A 5-year term cuts payments nearly in half versus 3-year, but increases total interest
• Origination fees: Some lenders charge 1-6% of the loan amount upfront
• Collateral: Secured loans (using home equity/assets) typically offer rates 3-8% lower than unsecured
• State regulations: Some states cap maximum interest rates for personal loans

Tips to Lower Your Payment

• Improve your credit first: Paying down cards to below 30% utilization before applying can boost scores
• Compare lender types: Credit unions often offer rates 2-5% lower than online lenders for fair credit
• Consider biweekly payments: Splitting payments in half every two weeks results in 13 full payments/year
• Negotiate with creditors: Some card issuers offer hardship programs with 0% APR for 6-12 months
• Target highest-rate debts: Consolidate only cards above 15% APR to maximize savings

Common Questions

Does debt consolidation hurt your credit?

There’s typically a 5-15 point temporary dip from the hard inquiry and new account, but scores usually recover within 6 months as credit utilization improves. The key is avoiding new credit card spending after consolidation.

How much debt is too much to consolidate?

Lenders typically cap debt consolidation loans at $50,000 for unsecured loans. A useful rule: if your minimum payments exceed 15% of gross monthly income, consider credit counseling instead.

Can I include personal loans in debt consolidation?

Yes, but only if the new loan’s rate is lower. Consolidating existing low-rate installment loans (like 5% auto loans) into higher-rate debt can increase costs.