Debt Consolidation Calculator
About Our Smart Debt Consolidation Calculator
Our smart calculator provides instant results and leverages AI to offer personalized insights.
Simplify Your Debt
Juggling 5 different payments with 5 different interest rates is stressful. Debt Consolidation rolls them all into one single payment, ideally with a lower rate.
Will It Work for You?
- Math Check: We calculate the "Weighted Average Rate" of your current debt to see if the new loan is actually cheaper.
- Cash Flow: See exactly how much your monthly payment will drop.
- Fee Watch: We factor in "Origination Fees" so you aren't blindsided by hidden costs.
What is Debt Consolidation?
Debt consolidation is the process of taking out a new loan to pay off multiple existing debts. Instead of making payments to five different creditors (like Visa, Mastercard, and a personal loan), you make one payment to the new lender.
The goal is not just convenience, but Savings. By securing a lower interest rate on the consolidation loan than the average rate of your credit cards (often 20%+), you can save thousands in interest.
What is the "Blended Rate" Trap?
To know if consolidation is smart, you must compare the new loan's APR to your current Blended Interest Rate (weighted average).
Example Scenario:
| Card A ($5,000) | 25% APR |
| Card B ($5,000) | 15% APR |
| Your Real "Blended Rate" | 20% APR |
If your new consolidation loan offers 12% APR, you win. If it offers 19% APR plus a 5% fee, you lose. Our calculator does this math for you instantly.
Secured vs. Unsecured Consolidation Loans
Where does the money come from? There are two main types of consolidation loans:
Unsecured Personal Loans
- Collateral: None (Signature loan).
- Risk: Low. If you default, your credit score drops, but you don't lose your house.
- Rates: Higher (8% - 15%+).
Secured Loans (HELOC/Home Equity)
- Collateral: Your Home or Car.
- Risk: High. If you default, you could face foreclosure.
- Rates: Lower (5% - 9%).
AI Analysis: The "Behavior" Check
Click "Get AI Advice" for a reality check. The biggest risk of consolidation isn't math—it's behavior.
- The Reload Risk: "You are clearing $10,000 in credit card debt. AI warns: If you don't cut up those cards, statistics show you will be back in debt in 18 months."
- Score Impact: AI explains that while opening a new loan might dip your credit score temporarily, paying off maxed-out cards will likely boost it significantly by lowering utilization.
Disclaimer
This Debt Consolidation Calculator assumes the new loan is used to pay off existing debts immediately. It calculates savings based on interest rate differentials. Origination fees are deducted from the loan amount or added to the balance, depending on lender terms. This tool does not guarantee loan approval.
Disclaimer & Usage Policy
1. For Reference Only: The calculations, results, and AI-generated insights provided by this tool are for informational and educational purposes only. They represent theoretical outcomes based on user inputs and general assumptions. They do not constitute actionable professional advice, medical diagnosis, or specific financial recommendations.
2. Consult a Professional: Real-world scenarios are complex and subject to changing laws, regulations, and scientific standards. This tool cannot account for your unique individual circumstances. We strongly recommend consulting with a qualified professional (such as a Financial Advisor, CPA, Doctor, or Legal Counsel) before making any actual decisions based on this information.
3. No Liability: By using this tool, you acknowledge that This Website and its affiliates are not liable for any discrepancies, errors, or losses (financial, health-related, or otherwise) arising from the use of or reliance on these tools. You assume full responsibility for your own choices and actions.