Debt Consolidation Calculator
Compare consolidation loan options and see if consolidating your debts makes financial sense
The Debt Consolidation Calculator helps you evaluate whether combining multiple debts into a single loan will save you money. Compare your current debt payments with potential consolidation loan terms to make an informed decision.
Current Debts
Debt 1
Debt 2
Consolidation Loan Options
Quick Scenarios
Consolidation Analysis
Enter your current debts and consolidation loan details to see the comparison
How Debt Consolidation Works
What is Debt Consolidation?
Debt consolidation involves taking out a new loan to pay off multiple existing debts. This combines all your debts into a single monthly payment.
Common consolidation methods:
- Personal loans
- Balance transfer credit cards
- Home equity loans or HELOCs
- 401(k) loans
When Does It Make Sense?
Debt consolidation can be beneficial when:
- You qualify for a lower interest rate
- You want to simplify multiple payments
- You need lower monthly payments
- You want a fixed payoff timeline
- You have good credit to qualify for better terms
Types of Consolidation Loans
Personal Loans
Rate: 6-36% APR
Term: 2-7 years
Pros: Fixed rate, predictable payments
Cons: May require good credit
Balance Transfer Cards
Rate: 0% promo, then 15-25%
Term: 6-24 month promo
Pros: 0% promotional rates
Cons: High rate after promo
Home Equity Loans
Rate: 3-8% APR
Term: 5-30 years
Pros: Low rates, tax deductible
Cons: Home as collateral
HELOC
Rate: Variable, 3-8%
Term: 10-30 years
Pros: Flexible access to funds
Cons: Variable rate, home at risk
401(k) Loans
Rate: Prime + 1-2%
Term: Up to 5 years
Pros: Pay interest to yourself
Cons: Reduces retirement savings
Debt Management Plans
Rate: Negotiated lower rates
Term: 3-5 years
Pros: Professional help
Cons: May affect credit
Example: Credit Card Consolidation
Scenario: $25,000 in credit card debt consolidated with a personal loan
Current Credit Cards
Consolidation Loan
Frequently Asked Questions
Will debt consolidation hurt my credit score?
Initially, applying for a new loan may cause a small, temporary dip in your credit score. However, consolidation can improve your score long-term by reducing credit utilization and making payments more manageable.
Should I close my credit cards after consolidating?
Generally, no. Keeping cards open maintains your credit history length and available credit. However, if you can't resist using them, consider closing some accounts or removing them from your wallet.
What if I can't qualify for a lower interest rate?
If you can't get a lower rate, consolidation may still be worth it for simplified payments or lower monthly payments (with a longer term). Consider improving your credit score first or exploring secured loan options.
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