Compare keeping multiple debts vs consolidating into one lower-rate personal loan. See your monthly savings, break-even point, and total interest saved over the loan term.
Compare separate debts vs one consolidated loan
Enter up to 5 debts. Leave balance at $0 to skip.
A debt consolidation calculator works by comparing your current monthly payments and total interest costs against a single new personal loan. The math is straightforward: if you owe $8,000 at 24% APR, $5,000 at 19% APR, and $3,000 at 15% APR — a blended rate of roughly 21% — and you qualify for a personal loan at 10%, consolidation saves you real money. Your new payment might be lower, your interest cost drops significantly, and you have one payment instead of three. The break-even calculation tells you whether the origination fee on the new loan is recovered before you'd pay off the debts anyway.
Debt consolidation doesn't make sense in every situation. If the new loan term is much longer than your current payoff timeline, you might pay more total interest even at a lower rate. Also, consolidating credit card debt and then running the cards back up again leaves you in a worse position than before. The best outcomes happen when borrowers close or freeze the cards after consolidating, treat the consolidation loan as a fixed payoff plan, and resist taking on new debt during repayment. Federal student loans should generally not be consolidated into private loans, as you'd lose income-driven repayment options and PSLF eligibility.
Combining three payments of $200, $120, and $75 into a single $280 payment frees up $115 per month immediately. That breathing room is one of consolidation's most practical benefits for US borrowers with tight budgets.
Moving $16,000 in mixed debt from an average 21% APR to a 10% personal loan can save over $4,000 in interest over 48 months — real money that stays in your pocket instead of going to lenders.
Managing one payment date, one lender, and one balance is far easier than juggling multiple accounts. Missed payments damage credit scores; a single payment schedule reduces that risk considerably.
Personal loan origination fees typically run 1%–8% of the loan amount. On a $16,000 loan, a 5% origination fee adds $800 upfront. The calculator factors this in so you see the true cost of consolidating.
Consolidation replaces several debts with one loan, and whether it helps depends on comparing the new rate against the weighted average of the old ones — not against the highest. The weighted average is the honest benchmark, because it reflects what the whole portfolio actually costs. Two traps recur. Extending the term can lower the monthly payment while increasing total interest, which feels like relief and is not. And consolidating revolving debt into an instalment loan frees the cards, so without closing them the common outcome is a consolidation loan plus fresh card balances.
Weighted average rate = Σ (balance × rate) ÷ Σ balancesNew payment = consolidated balance amortized at the new rate over the new termTotal interest = (payment × months) − amount consolidatedwhere:
Assumptions: Secured consolidation (home equity) offers lower rates but converts unsecured debt into debt that can cost you your home. Assumes the cards are not used again.
Compute the weighted average rate first, then test the consolidation offer against it.
Result23.80% weighted average → 11.9% — $312.93/month, cleared in 5 years
The comparison that matters is 11.9% against 23.80%, not against the 27% worst card. Note also that the payment rises from $282 to $312.93 — consolidation here buys a definite end date rather than immediate relief, which is usually the right trade.