Debt Consolidation Savings Calculator – See How Much You Can Save
Consolidating multiple debts into one loan can simplify payments and reduce your interest costs. Use this free Debt Consolidation Savings Calculator to estimate your new monthly payment, total interest savings, and how quickly you can become debt-free. Compare your current debt situation with potential consolidation loan options instantly.
Current Debt Information
Debt #1
Consolidation Loan Details
Avg. for US: 11.8%
Typical: 1-6%
User Information (Optional)
What Is Debt Consolidation?
Debt consolidation is the process of combining multiple debts into a single new loan, typically with more favorable terms. Instead of managing multiple payments to different creditors with varying interest rates, you make one monthly payment to a single lender. This strategy can simplify your financial life and potentially save you money if you secure a lower interest rate.
Common types of debt consolidation include personal loans, balance transfer credit cards, and home equity loans. Personal loans are the most popular option, offering fixed interest rates and predictable monthly payments. Balance transfer cards can provide 0% introductory periods, while home equity loans may offer lower rates but use your home as collateral.
How to Use the Debt Consolidation Calculator
Our debt consolidation calculator makes it easy to compare your current debt situation with potential consolidation options. Start by entering each of your current debts, including the balance, interest rate, and minimum monthly payment. You can add up to 10 debts to get a complete picture of your current financial situation.
Next, enter the terms of your potential consolidation loan, including the interest rate, loan term, and any origination fees. The calculator will instantly show you your potential monthly savings, total interest savings, and how much faster you could become debt-free. Use this information to make an informed decision about whether debt consolidation is right for you.
When Debt Consolidation Makes Sense
Good Candidates
- Multiple high-interest credit cards (18%+ APR)
- Credit score has improved since taking on debts
- Can secure a lower fixed interest rate
- Steady income to support monthly payments
Consider Alternatives
- Low interest rates on existing debts
- Poor credit score (below 580)
- Irregular income or cash flow issues
- Debt amount is relatively small
Benefits of Debt Consolidation
Financial Benefits
- Lower Interest Rates: Reduce total interest paid over time
- Fixed Monthly Payment: Predictable budgeting with set payments
- One Payment Date: Simplified financial management
- Faster Payoff: Fixed end date for becoming debt-free
Credit & Mental Benefits
- Credit Score Improvement: Lower credit utilization ratio
- Reduced Stress: One payment instead of many
- No More Collection Calls: Single lender relationship
- Financial Clarity: Clear path to debt freedom
Frequently Asked Questions
Our debt consolidation calculator provides highly accurate estimates based on the information you provide. The calculations use standard amortization formulas and account for origination fees. However, actual loan offers may vary based on your credit score, income, lender-specific terms, and other factors. We recommend getting multiple quotes to compare with your calculator results.
Debt consolidation may cause a temporary dip in your credit score due to the hard inquiry when applying for a new loan. However, it can improve your score long-term by lowering your credit utilization ratio and establishing a positive payment history. The impact varies by individual, but most people see their scores recover within 3-6 months and improve over time with consistent payments.
You can consolidate most unsecured debts, including credit cards, personal loans, medical bills, and payday loans. Some lenders also allow consolidation of secured debts like auto loans, though this is less common. Federal student loans typically cannot be consolidated with private debts, but have their own consolidation programs through the Department of Education.
Personal loans are better for larger debt amounts ($5,000+) and offer fixed rates and terms, making budgeting easier. Balance transfer cards work well for smaller amounts ($3,000 or less) and can provide 0% interest for 12-21 months, but require good to excellent credit and have variable rates after the introductory period. Consider your debt amount, credit score, and ability to pay within the promotional period when deciding.
Disclaimer
This calculator is for informational purposes only. Results are estimates and may vary depending on credit score, loan type, and lender policies. Always compare multiple offers before consolidating your debt. Consult with a financial advisor to determine if debt consolidation is appropriate for your situation.