Compare your current multiple debt payments against a single consolidation loan — see your monthly savings, total interest saved and whether consolidation makes financial sense.
Enter your figures and click Calculate to see your results.
Enter your total debt, current payments and rate, then the consolidation loan rate and term to compare both scenarios.
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Debt consolidation combines multiple debts into a single new loan, ideally with a lower interest rate. Instead of managing several payments to different creditors, you make one monthly payment. It can reduce monthly payments, total interest paid or both.
Consolidation makes sense when the new loan rate is meaningfully lower than your current average rate, the term is not so long that total interest paid increases, and you will not accumulate new debt on the cards you have paid off.
Common options include personal loans (unsecured), home equity loans or HELOCs (secured against your property), balance transfer credit cards with 0% promotional APR, and debt management plans through credit counselling agencies.
Initially, applying for a new consolidation loan causes a small temporary dip due to the hard inquiry. Over time, if consolidation leads to lower credit utilisation and on-time payments, your score typically improves.
You are converting unsecured debt (credit cards) into debt secured by your home. If you cannot repay the consolidated loan, you risk losing your property. This trade-off should be considered very carefully.
Often yes — by extending the repayment term or securing a lower rate. However, a lower monthly payment over a longer term can result in more total interest paid even at a lower rate. Always check total cost, not just monthly payment.
Origination fees (1–8% of the loan), prepayment penalties, balance transfer fees (3–5%), and closing costs for home equity products. This calculator includes an origination fee field so you can account for these costs.
Consolidation combines debts into one new loan at agreed terms — it does not reduce the principal owed. Debt settlement negotiates with creditors to accept less than the full amount owed. Settlement severely damages credit and has tax implications.
Financially, keeping them open (with zero balance) maintains your available credit and helps your credit utilisation ratio. Behaviourally, if you tend to spend on available credit, closing them may help prevent re-accumulation of debt.
It depends on the loan term you choose. Personal consolidation loans typically range from 24 to 84 months (2–7 years). Shorter terms mean higher monthly payments but less total interest. This calculator models any term you enter.
