The Debt Consolidation Calculator compares your current debts with a single consolidation loan, including fees, to show the real cost and the true APR of consolidating.
The consolidation loan saves $4,200.29 and is the better choice.
| Current debts / Consolidation loan | |
| Total principal | $24,000.00 / $25,000.00 |
| Monthly payment | $630.00 / $543.44 |
| Payoff length | 5 years and 5 months / 5 years |
| Total interest | $13,056.45 / $7,606.15 |
| Fees | $0.00 / $1,250.00 |
| Average interest rate | 18.886% / 10.990% |
| Real APR of the loan (with fee) | 13.250% |
Debt consolidation replaces several debts with one new loan, ideally at a lower interest rate. It simplifies your finances to a single monthly payment and can reduce the total interest you pay, especially if you are swapping high-rate credit card balances for a personal loan.
A lower rate does not automatically mean savings. Origination fees of 1–8% are common and are usually taken out of the loan, so you receive less than you borrow. A longer term can lower the monthly payment but increase the total interest. That is why this calculator shows the real APR (the rate including the fee) and compares total interest plus fees for both options.
Worked example: $24,000 of card debt at about 19% versus a $25,000 loan at 10.99% for five years with a 5% fee. The loan's real APR is about 13%, still well below the cards, so consolidation saves money here.
Personal loans have fixed rates and terms. Balance transfer cards offer 0% for an introductory period but charge a transfer fee and revert to a high rate. Home equity loans and HELOCs have lower rates but put your house at risk. 401(k) loans avoid credit checks but reduce retirement growth.
Will consolidation hurt my credit? A new application causes a small temporary dip; lower utilization often improves your score afterward.
Should I close the old cards? Keeping them open helps utilization, but only if you will not run them up again.
What credit score do I need? Better rates usually need scores above about 670.