Consolidating several debts into one loan only saves money if the new rate is genuinely lower than what’s being replaced — this calculator compares both paths on the same amortising-payment math, over the same repayment term.
How it works
The current combined balance is run through the standard loan-payment formula twice: once at its current weighted-average rate, once at the proposed consolidation rate, both over the same number of years. The difference in monthly payment and total interest paid is the real effect of consolidating.
What “weighted average” actually means here
If several debts carry different rates, the current rate entered should reflect the balance-weighted average across all of them — a $15,000 balance at 24% and a $5,000 balance at 6% average closer to 24% than to a simple midpoint, since more of the debt sits at the higher rate.
How to use this calculator
- Enter the combined balance and its current weighted-average rate.
- Enter the rate and term being offered on the consolidation loan.
Frequently asked questions
Does consolidating always lower my monthly payment?
Only if the new rate is lower, or the new term is longer — a longer term can lower the monthly payment even at a similar rate, but usually increases total interest paid over the life of the loan.
Does this account for fees on the consolidation loan itself?
No — origination fees or similar upfront costs on the new loan aren’t included; this site’s APR calculator can be used separately to see how fees affect the loan’s true cost.
Is a longer term ever a bad idea even if the rate drops?
It can be — stretching repayment out further can increase total interest paid even at a lower rate, if the term is extended by enough. Comparing total interest, not just the rate, is what this calculator is for.
