Debt Consolidation Calculator
See whether rolling your debts into one loan lowers your monthly payment and your blended interest rate.
How it's calculated
Debt consolidation rolls several balances into one loan with a single payment. The appeal is simplicity and, ideally, a lower rate than the mix you carry now. It helps most when high-rate credit card debt is dragging up your blended rate, since a personal loan or consolidation loan often charges less than a card does.
Take the default. Three debts, an $8,000 card at 22.9 percent, a $12,000 balance at 18.9 percent, and a $5,000 loan at 12 percent, add up to $25,000. Weighted by their balances, the blended rate is 18.8 percent, and the minimum payments total $750 a month. Consolidate the $25,000 into a single loan at 12 percent over 5 years and the payment becomes $556.11 a month, with $8,366.67 of interest across the loan. That is about $193.89 less each month than the current minimums, and every dollar now goes toward a fixed payoff date instead of revolving.
Two cautions. A lower monthly payment can come from stretching the term rather than cutting the rate, which can mean more interest over time even as the payment falls, so watch the rate and the total interest, not just the payment. And consolidation only works if you stop adding new charges to the cleared cards. Used well, it lowers your rate and gives you one fixed payoff date. Used carelessly, it frees up cards that fill back up.
Assumptions
- The consolidation loan is your total balance amortized at the rate and term you set. The new payment is that single loan payment.
- The blended rate is your balances weighted by their rates. Monthly savings compares your current total minimum payments against the new single payment.
Last updated: 2026-08-08
These assumptions follow our general methodology.
Frequently asked questions
Does debt consolidation save money?
It saves money when the new loan rate is below your current blended rate, since less of each payment goes to interest. If the new rate is similar but the term is longer, the monthly payment falls yet the total interest can rise. Compare the blended rate and the total interest, not just the payment.
What is a blended interest rate?
It is the average of your rates weighted by each balance, so a large high-rate debt pulls it up more than a small one. It tells you the true cost of the debt you carry today and gives you the number a consolidation loan has to beat to be worth it.
Is a lower monthly payment always good?
Not always. A lower payment often comes from a longer term, which can mean paying more interest overall even though each month is easier. Use consolidation to lower your rate, and keep the term as short as your budget allows to hold down the total cost.
What are the risks of consolidating debt?
The main risk is behavioral. Paying off cards with a loan frees up the cards, and if they fill back up you end with more debt than before. Consolidation also does not fix overspending. It works best paired with a plan to stop adding new debt.