How to use this calculator
- Your current debts. For up to five credit cards or loans, enter the balance, APR and what you pay each month. Debts 4 and 5 are optional.
- Consolidation loan. Enter the loan’s interest rate, the term, and the origination fee as a percentage.
- Fee is. Choose Taken from loan if the lender deducts the fee from the money it sends (the usual setup for personal loans), or Paid up front if you pay it separately.
The headline shows how much you’d save (or lose) in interest and fees. The results also show the monthly payment change, how much sooner or later you’d be debt-free, when the fee pays for itself, and the loan’s APR with the fee included. The chart tracks the remaining balance on both paths.
How the comparison works
Your current path keeps paying each debt at its current monthly payment until it’s gone. Interest accrues each month at APR ÷ 12. This uses the same engine as the debt payoff calculator, with no extra payments.
The consolidation loan borrows enough to pay every balance today. If the fee comes out of the loan, you must borrow more:
- B is the total of your balances; f is the fee as a decimal (5% = 0.05)
- r is the monthly rate (annual rate ÷ 12); n is the term in months
The total cost of each path is its interest plus any fees. The difference between them is your savings. The break-even is the first month in which the interest you’ve saved, added up month by month, is at least as large as the fee.
Worked example
Three cards totaling $12,000: $6,000 at 24.99%, $3,500 at 21.49% and $2,500 at 27.99%, with payments of $180, $105 and $90 ($375 a month). The balance-weighted average APR is 24.59%. At those payments they’re paid off in 58 months with $7,796.95 of interest.
A 48-month loan at 12% with a 5% fee taken from the proceeds:
- Loan amount: $12,000 ÷ 0.95 = $12,631.58, of which $631.58 is the fee
- Monthly payment: $332.64, which is $42.36 less than now
- Interest: $3,335.04, plus the $631.58 fee = $3,966.62 total cost
- Savings: $7,796.95 − $3,966.62 = $3,830.33, and debt-free 10 months sooner
- Break-even: month 6. The loan’s APR including the fee is 14.78%.
That’s a clear win, provided the cards stay paid off.
How the term changes the result
Same debts and same 12% loan with a 5% fee:
| Term | Monthly payment | Loan interest | Interest + fee | Savings vs current debts | APR with fee |
|---|---|---|---|---|---|
| 24 months | $594.61 | $1,639.14 | $2,270.72 | $5,526.23 | 17.23% |
| 36 months | $419.55 | $2,472.19 | $3,103.77 | $4,693.18 | 15.61% |
| 48 months | $332.64 | $3,335.04 | $3,966.62 | $3,830.33 | 14.78% |
| 60 months | $280.98 | $4,227.47 | $4,859.05 | $2,937.90 | 14.28% |
| 72 months | $246.95 | $5,148.77 | $5,780.35 | $2,016.60 | 13.95% |
| 84 months | $222.98 | $6,099.04 | $6,730.62 | $1,066.33 | 13.71% |
The shortest term saves the most but needs the biggest payment. The longest cuts the payment by $152 a month yet keeps you in debt for seven years. The APR with the fee falls as the term grows only because the fee is spread over more months; total cost still rises.
How the rate and the fee change the result
On a 48-month loan with a 5% fee:
| Loan rate | Monthly payment | Savings | Fee break-even | APR with fee |
|---|---|---|---|---|
| 8% | $308.37 | $4,994.97 | Month 4 | 10.70% |
| 12% | $332.64 | $3,830.33 | Month 6 | 14.78% |
| 16% | $357.98 | $2,613.77 | Month 9 | 18.87% |
| 20% | $384.38 | $1,346.45 | Month 18 | 22.96% |
| 24% | $411.81 | $29.88 | Month 54 | 27.06% |
At 24% the loan barely beats the cards, even though its rate is just under their average APR, because the fee eats the difference. On a 12% loan over 48 months, the fee matters too:
| Origination fee | Loan amount | Fee | Monthly payment | Savings | Break-even |
|---|---|---|---|---|---|
| 0% | $12,000.00 | $0 | $316.01 | $4,628.74 | Immediate |
| 3% | $12,371.13 | $371.13 | $325.78 | $4,159.51 | Month 4 |
| 5% | $12,631.58 | $631.58 | $332.64 | $3,830.33 | Month 6 |
| 8% | $13,043.48 | $1,043.48 | $343.48 | $3,309.62 | Month 10 |
Compare offers by APR, which includes the fee, not by the interest rate alone. The APR calculator converts any rate and fee into an APR.
Before you consolidate
The Consumer Financial Protection Bureau and the Federal Trade Commission both point out risks worth checking:
- Low rates may be temporary. Some consolidation offers advertise teaser rates that rise after a set period. Use the rate that applies for the whole loan.
- A lower payment can mean a longer, costlier loan. The term table above shows how.
- Don’t secure card debt with your home lightly. A home equity loan may carry a lower rate, but if you can’t repay it you could lose your home.
- Fix the cause. If spending caused the debt, a consolidation loan can free up the cards to be run up again. Many people keep the cards open for their credit history but stop using them.
- Watch for debt settlement pitches. Companies that charge fees before settling any of your debts are a red flag.
If the numbers don’t work, paying the cards down faster may be the better route. The credit card payoff calculator and personal loan calculator help compare options, and the budget calculator can find room for extra payments.
Assumptions & limitations
Your current debts are paid at their current payments with no new charges, and their APRs don’t change. The loan has a fixed rate and level monthly payments, with interest rounded to the cent each month. Payments that change over time, such as a credit card minimum that falls as the balance drops, would change the current-path figures. Taxes, late fees and credit score effects aren’t modeled.
Sources
This comparison is an estimate for planning. Your lender’s Truth in Lending disclosure shows the actual APR and payments.
Frequently asked questions
Is debt consolidation worth it?
It's worth it when the new loan's total cost, interest plus fees, is lower than what you'd pay by keeping your current debts, and when you won't run the old balances back up. A lower monthly payment alone doesn't prove it. A longer term can lower the payment while raising the total cost, so compare both.
How does an origination fee affect a consolidation loan?
Most personal loan origination fees are deducted from the loan proceeds, so you need to borrow more to pay off the same balances. To clear $12,000 of debt with a 5% fee, you borrow $12,631.58, pay a $631.58 fee and pay interest on the larger amount. That raises the loan's effective APR above its interest rate.
What is the break-even point on a consolidation loan?
It's the month when the interest you've saved by consolidating has covered the origination fee. In the example on this page, a 5% fee on a 12% loan breaks even in month 6. If interest savings never cover the fee, consolidation costs more than it saves.
Will a longer loan term save me money?
Usually not. A longer term lowers the monthly payment but spreads interest over more months. On $12,000 of card debt, a 12% loan with a 5% fee saves $5,526 over 24 months but only $1,066 over 84 months compared with keeping the cards.
Does debt consolidation hurt your credit?
Applying for a new loan usually adds a hard inquiry, and a new account lowers your average account age, which can dip your score briefly. Paying down card balances lowers your credit utilization, which often helps. On-time payments on the new loan matter most over time.
What are the alternatives to a consolidation loan?
A balance transfer card can work if you can repay during the promotional period, but most charge a transfer fee and the low rate is temporary. Paying debts down with the avalanche or snowball method costs nothing to set up. A nonprofit credit counselor can also help you build a repayment plan.
Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.