Debt Consolidation Calculator

The Weighted Average Rate Trap

A consolidation loan isn't automatically cheaper just because the advertised APR looks lower than your worst card. What matters is whether it beats the blended cost of everything you currently owe. Lenders also fold an origination fee straight into the new principal, which quietly raises the bar a new loan has to clear before it actually saves you money.

How to Use This Calculator

List every debt you're considering rolling into one loan, with its current balance, APR, and the monthly payment you're actually making on it today. Then set the terms of the loan you're comparing it against: its APR, its term in months, and any origination fee (lenders typically charge 1-8% of the loan amount, taken out of your proceeds or added to the balance). The calculator does the rest: it blends your existing debts into a single weighted average rate, simulates paying each side down month by month, and reports the total dollar difference over each path's full payoff.

A Worked Example

Using this calculator's default numbers: a $5,000 card at 22.9% ($150/mo), a $3,000 card at 18.9% ($90/mo), and an $8,000 personal loan at 12.5% ($250/mo) - $16,000 total at a 16.95% weighted average rate, paid at $490/mo combined. Paying each debt down as-is on its own payment clears the loan in 40 months, the $3,000 card in 48 and the $5,000 card in 54, for $22,091 paid in total (principal plus interest).

Rolling all three into a single 9.5% APR loan over 36 months, with a 3% origination fee, adds $480 to the principal for a $16,480 balance. That loan's payment works out to $527.90/mo, for $19,004.51 paid over its full term. Net result: about $3,087 saved, and the debt is retired 18 months sooner (36 months instead of 54), though the monthly payment rises by $37.90 - because 9.5% clears the 16.95% blended rate by a wide enough margin to absorb the fee.

Assumptions and Limitations

This tool assumes every current-debt payment stays fixed at today's amount for the life of the payoff, and that the new loan is a standard fixed-rate installment loan with no rate changes. It does not model your credit score's effect on the rate you'd actually be offered, the temporary dip from a hard credit inquiry, tax treatment, or what happens if a paid-off credit card gets reused. If your combined current payment doesn't cover the interest accruing on your balances, the calculator flags that directly rather than reporting a payoff timeline that won't happen. For a decision involving your actual credit report and lender offers, a nonprofit credit counselor (many are free) or a fee-only financial advisor can review your specific numbers.