Debt consolidation calculator
See whether one new loan costs less than the debts you have now, in interest, per month and in months to debt-free.
- Calculated in your browser
- Formula and rounding
- Reviewed
Interest saved by consolidatingExample
$340.79
Cheaper every month and less interest overall
- New monthly payment
- $346.09-$153.91 vs now
- Current monthly payment
- $500.00
- Interest with the loan
- $806.08vs $1,146.87 now
- Months to debt-free
- 24 months6 months longer (now: 18 months)
- Interest if you keep paying as now$1,146.8759%
- Interest with the new loan$806.0841%
Total currently paid each month
your budget (or Σ minimums)debts = 2budget = 500
= 500
New loan principal
Σ balances + feebalances = 7500fee = 0
= 7500
Monthly rate on the new loan
i = APR ÷ 12aprPct = 10
= 0.00833333…
Level monthly payment
P·i ÷ (1 − (1+i)^−n)P = 7500i = 0.00833333…n = 24
= 346.09
Interest saved
current interest − loan interestcurrent = 1146.87loan = 806.08
= 340.79
Change in monthly payment
new payment − current payment (negative = cheaper)new = 346.09current = 500
= -153.91
Months to debt-free
current months − loan termcurrent = 18term = 24
= -6
| Keep paying as now | New loan | |
|---|---|---|
| Monthly payment | $500.00 | $346.09 |
| Months to debt-free | 18 months | 24 months |
| Total interest | $1,146.87 | $806.08 |
| Total repaid | $8,646.87 | $8,306.08 |
Assumptions
- The new loan has one fixed rate for the whole term; interest is charged monthly at APR ÷ 12, rounded to the minor unit.
- The current path assumes you keep paying 500.00 each month in avalanche order (highest APR first).
- The new loan clears every balance immediately, so no interest is charged on the old debts. No fees beyond the fee you entered, and no early-repayment penalties.
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Estimates for general information only — not financial, credit or legal advice. Your actual figures depend on your lender’s or card issuer’s exact terms, fees, minimum-payment rules, interest calculation method and any changes they make. Check your statements and speak to a qualified adviser before making decisions. Consolidation only saves money if the new loan’s APR and fees beat your current debts, and approval is never guaranteed. Disclaimer · Report an error
How to work out whether a debt consolidation loan saves money
A debt consolidation loan replaces several balances with one loan and one monthly payment. Whether that saves money depends on three things working together: the new loan’s APR, its term and any fee. A lower APR can still cost more in total if the term is long, and a fee adds to the principal before the first payment is made.
This calculator puts both paths next to each other. The “keep paying as now” column simulates your current debts month by month with the amount you already pay, in avalanche order (highest APR first). The “new loan” column prices a single fixed-rate loan for the total you owe plus any fee. The headline is the interest you would save, or the extra interest you would pay, by consolidating. It works in any currency.
- 1
List your debts
Enter the balance, APR and minimum payment for each card or loan you would consolidate. Add or remove rows as needed.
- 2
Enter what you pay now and the loan on offer
Type the total you currently pay each month across these debts, then the APR and term of the consolidation loan. Open “Fees” to add an arrangement fee that is added to the loan.
- 3
Read both columns, not just the headline
The comparison table shows the monthly payment, months to debt-free, total interest and total repaid for each path. A loan can win on interest and lose on time, or the other way round.
What this calculator does
- Side-by-side comparison: keep paying as now vs one new loan
- Interest saved or added by consolidating, in your currency
- New monthly payment and the change from what you pay now
- Months to debt-free on both paths, and the difference
- Arrangement fees added to the loan principal
- Current path simulated month by month in avalanche order
- Show working, assumptions and a CSV of the comparison
Worked example: two debts, 500 a month, versus a 10% loan over 24 months
A card at 24% and a loan at 6%, consolidated into one loan at 10% over two years
Debt A is 6,000 at 24% APR with a 150 minimum. Debt B is 1,500 at 6% APR with a 50 minimum. You currently pay 500 a month towards them. A lender offers a consolidation loan at 10% APR over 24 months with no fee.
| Keep paying as now | New loan | |
|---|---|---|
| Monthly payment | 500.00 | 346.09 |
| Months to debt-free | 18 | 24 |
| Total interest | 1,146.87 | 806.08 |
| Total repaid | 8,646.87 | 8,306.08 |
Keeping the debts as they are and paying 500 a month in avalanche order clears both in 18 months with 1,146.87 of interest. The new loan borrows 7,500 (the two balances added together), costs 346.09 a month and 806.08 in interest over 24 months. In this scenario consolidating saves 340.79 in interest and lowers the monthly payment by 153.91, so the loan wins on both counts.
It also takes 6 months longer. Both can be true at once: the 10% loan charges less interest per month than the 24% card, so the total interest falls even though the balance is outstanding for longer. The lower payment is a result of spreading 7,500 over 24 months rather than clearing it as fast as 500 a month allows. Choose an 18-month term for the same loan and the payment becomes 450.43 a month, the interest 607.71, and you are debt-free in the same 18 months with 539.16 saved.
How it’s calculated
The current path is the same month-by-month simulation used by the debt payoff calculator. Each month every debt is charged interest = round(balance × APR ÷ 12), every minimum is paid, and the rest of your monthly amount goes to the debt with the highest APR. When that debt is cleared, the next-highest takes over. The simulation stops when every balance is zero, which gives the months to debt-free and the total interest for that column.
The new loan borrows the sum of your balances plus any fee you enter: in the example, 6,000 + 1,500 + 0 = 7,500. The monthly payment uses the standard annuity formula payment = P × i ÷ (1 − (1 + i)^−n), where P is the principal, i the monthly rate (10% ÷ 12) and n the number of months. For 7,500 over 24 months that gives 346.09, rounded to the minor unit of your currency. Interest on the loan is then charged monthly on the falling balance, and the final payment absorbs any rounding.
The three comparison figures are plain differences of those outputs: interest saved = current interest − loan interest (340.79), payment change = loan payment − current payment (−153.91) and months saved = current months − loan term (−6, meaning six months longer). “Cheaper every month and less interest overall” appears only when the payment change is zero or negative and the interest saved is zero or positive.
Why a lower APR can still cost more
Interest is charged on whatever is still owed each month. Stretching the same balance over more months means more months of interest, and past a certain term that outweighs the lower rate. Using the example debts and the same 10% loan:
| Loan term | Monthly payment | Total interest | Versus paying 500 now |
|---|---|---|---|
| 18 months | 450.43 | 607.71 | 539.16 less interest, same 18 months |
| 24 months | 346.09 | 806.08 | 340.79 less interest, 6 months longer |
| 36 months | 242.00 | 1,212.17 | 65.30 more interest, 18 months longer |
| 60 months | 159.35 | 2,061.28 | 914.41 more interest, 42 months longer |
At 60 months the payment is less than a third of what you pay now, and the headline on this page flips to “extra interest from consolidating”. The APR never changed; only the term did. That is why the calculator shows the months to debt-free next to the interest figure rather than reporting a monthly saving on its own. For how term and rate interact on a single loan, see our guide to debt consolidation loans.
What an arrangement fee does to the numbers
Some consolidation loans charge an arrangement or origination fee. When it is added to the loan rather than paid upfront, you borrow it and pay interest on it. Adding a 300 fee to the example loan raises the principal to 7,800, the payment to 359.93 a month and the interest to 838.30. The saving against the current path falls from 340.79 to 308.57, and the monthly payment is still 140.07 lower than now. A bigger fee, a higher rate or a longer term each eat into the saving, and together they can remove it.
The calculator only includes the fee you enter. Early-repayment charges on your existing loans, balance-transfer fees, insurance or a fee paid upfront in cash are not modelled, so add them to your own comparison if they apply.
Related calculations
To compare paying the same debts off in avalanche or snowball order without a new loan, use the debt payoff calculator. To see how long a card takes to clear at its minimum payment alone, the credit card minimum payment calculator runs the issuer’s minimum rule month by month. Lenders often look at your debt-to-income ratio when deciding whether to offer a consolidation loan, and our guide to how credit card interest works explains the daily-interest arithmetic that makes card balances so expensive to carry.
Good to know
- The current path assumes you keep paying the same amount every month in avalanche order. If you only pay the minimums, enter their total as what you pay now.
- Minimum payments are treated as fixed amounts. Many card minimums are a percentage of the balance and fall as it falls, which would make the current path slower and dearer than shown.
- The new loan is modelled at one fixed rate for the whole term. A variable rate, a promotional rate that ends, or a lender that quotes an effective APR will give different figures.
- Interest is charged monthly at APR ÷ 12 and rounded to the minor unit. Lenders that calculate daily interest will differ by small amounts.
- Approval is never guaranteed, and the rate you are offered can be higher than the advertised one. Re-run the comparison with the rate on the actual offer.
What happens to the numbers you type
Your numbers stay in your browser. DebtWren works out your results on your device. We don’t send the balances, rates or payments you type to our servers or store them. If you allow analytics, we record only broad ranges (for example “£2,000–£5,000 of debt”) to understand how the calculators are used. Like any website with ads, this page also loads advertising scripts; see our Privacy Policy.
The calculator is plain code running in this tab. It makes no network requests with your figures, and nothing is saved when you leave unless you choose to keep it. Read the privacy policy for how ads and analytics work on this site.
Related calculators and guides
- Debt consolidation loans explained: when one loan beats manyHow consolidating works, what it can save, and the fees and habits that decide if it pays off.
- Debt-to-income ratio explained: the number lenders look atHow DTI is worked out, what counts as income and debt, and what a good ratio looks like.
Questions people ask
Does a debt consolidation loan save money?
Only when the new loan’s interest, including any fee, is less than the interest you would pay by keeping the debts as they are. In the worked example a 10% loan over 24 months saves 340.79 against paying 500 a month to a 24% card and a 6% loan; the same loan over 60 months costs 914.41 more. The calculator shows both columns so you can see which applies to your figures.
Why does the loan cost less per month and less in interest, but take longer?
The payment is lower because 7,500 is spread over 24 months instead of being cleared as fast as 500 a month allows (18 months). The interest is lower because 10% a year is charged on the balance instead of 24% on the biggest debt. A lower rate for more months can still add up to less interest, as it does here. Extend the term far enough and that stops being true.
What happens if the fee is added to the loan?
The fee becomes part of the principal, so you pay interest on it for the whole term. A 300 fee on the example loan raises the principal to 7,800 and the total interest from 806.08 to 838.30, and cuts the saving from 340.79 to 308.57. Enter the fee under “Fees” to see its effect on your own figures.
Why can a lower APR still cost more overall?
Interest is charged every month on what is still owed, so a longer term means more months of charges. At 10% over 36 months the example loan pays 1,212.17 in interest, which is 65.30 more than the current path at 24% and 6%, because the balance is outstanding for 18 extra months. Compare total interest and months to debt-free together, not the APR alone.
Does consolidating debt affect my credit score?
Applying for a new loan usually involves a credit check, and opening a new account and closing old ones changes the mix and age of your accounts, so scores can move in either direction. How much, and for how long, depends on the credit reference agency and your wider record. DebtWren calculates costs and does not predict credit scores.
What is the difference between a secured and an unsecured consolidation loan?
A secured loan is tied to an asset, most often your home, which the lender can repossess if you do not repay. An unsecured loan has no such link. Secured loans often carry lower rates and longer terms, so the arithmetic on this page is the same but the consequences of missing payments are different. The calculator does not distinguish between them; enter the rate, term and fee from the offer.
What if what I pay now is less than my minimum payments?
The calculator stops and tells you the shortfall, because the current path assumes every minimum is paid each month. Enter at least the total of your minimums; the hint under the “What you pay each month now” field reminds you of this.
Why does the current path use avalanche order?
Avalanche (highest APR first) is the order that costs the least interest for a fixed monthly amount, so it is the fairest baseline for a loan to beat. If you would pay in a different order, the debt payoff calculator shows how much more that order would cost.
Sources and review
- CFPB — What do I need to know if I’m thinking about consolidating my credit card debt?
- CFPB — What is the difference between a fixed APR and a variable APR?
- Federal Trade Commission — Coping with debt
- FCA Handbook — CONC App 1: Total charge for credit rules (APR)
- Federal Reserve — Consumer Credit (G.19) statistical release
Estimates for general information only — not financial, credit or legal advice. Your actual figures depend on your lender’s or card issuer’s exact terms, fees, minimum-payment rules, interest calculation method and any changes they make. Check your statements and speak to a qualified adviser before making decisions. Consolidation only saves money if the new loan’s APR and fees beat your current debts, and approval is never guaranteed.
Page reviewed by the DebtWren team · Methodology · Changelog · Report an error