Last updated October 8, 2026 · Report an error
Consolidating several high-interest debts into one lower-rate loan can save real money — but only if the new loan's total cost is actually lower than continuing to pay off the current debts at their current rate.
This calculator simulates your current debts' payoff at their current combined payment and interest rate, then compares that to a new consolidation loan's fixed-term cost, showing the real total interest difference.
How it works
Enter your total combined debt balance, current weighted-average APR, and current total monthly payment across all debts, plus the new consolidation loan's APR and term. The tool simulates your current payoff month-by-month, calculates the new loan's fixed payment, and compares total interest paid under each scenario.
- Enter total combined debt balance.
- Enter current weighted-average APR (%).
- Enter current total monthly payment (all debts combined).
- Enter new consolidation loan APR (%).
- Enter new consolidation loan term (months).
- Click Calculate to see your results.
Examples
Consolidating $20,000 in debt
$20,000 at a 22% average APR paid at $600/month takes 52 months and costs about $11,192 in interest — consolidating into a 12% APR, 48-month loan cuts total interest to about $5,281, saving roughly $5,912.
Who should use it
- Deciding whether a debt consolidation loan offer is actually worth taking.
- Comparing total interest cost between current debts and a consolidation option.
Industry applications
- Personal finance and debt management
- Credit counseling and financial advising
Advantages
- Simulates actual current debt payoff rather than assuming a rough estimate.
- Shows both monthly payment change and total interest saved.
Limitations
- Uses a single weighted-average APR for current debts rather than modeling each debt individually.
Common mistakes to avoid
- Focusing only on the lower monthly payment without checking whether total interest paid actually decreases.
- Not accounting for the current weighted-average APR accurately when debts have very different rates.
Best practices
- Compare total interest paid, not just the monthly payment, since a longer consolidation term can lower payments while costing more overall.
Tips
- If two consolidation offers have similar monthly payments, compare their total interest cost instead — the lower monthly payment sometimes comes from a longer term that costs more overall.