Debt Consolidation Calculator

How Debt Consolidation Works (and When It Helps)

A debt consolidation loan replaces multiple balances (often credit cards or personal loans) with a single new loan. The two main reasons people consolidate are (1) to secure a lower interest rate and reduce total interest, and (2) to create a simpler, predictable monthly payment. When consolidation reduces your APR without stretching the term too far—or when it trades a volatile set of card minimums for one affordable payment—it can be a useful tool.

This calculator models both sides: your current debts using a minimums-only benchmark, and a single amortizing loan with your chosen APR, term length, and any origination or transfer fees. We compute the new monthly payment, total interest over the life of the loan, and the projected months to debt-free. You’ll also see the difference in monthly outflow and estimated interest savings versus staying the course. Because everything runs locally in your browser, your inputs stay private.

Key ideas to keep in mind

• Rate vs. term trade-off: A lower APR usually lowers interest, but a much longer term can increase total interest even if the payment is smaller. Check the “Total Interest” line, not just the monthly payment.
• Fees matter: Origination or balance transfer fees effectively increase the amount financed. Add them in to get a realistic comparison.
• Behavior beats math: Consolidation works best when you stop new spending on the paid-off cards. Otherwise, you could end up with both a new loan and fresh card balances.
• Extra payments accelerate payoff: Even a small fixed extra amount toward principal each month can meaningfully reduce time and interest.

Example

Suppose you have £7,500 across cards at 19–25% APR with £250 in combined minimums. A 10.99% consolidation loan for 48 months (3% fee) might set your new payment around £196–£205, trimming monthly strain and reducing long-run interest if you avoid new charges. If the new term were 84 months, the payment would drop further but total interest might rise—use the calculator to see the trade-offs.

Informational only — not financial advice. Lender policies, compounding conventions, and your real minimums may differ from this simplified model. Always review actual loan terms and your statements.