Debt Consolidation Calculator
Combine multiple card balances into one loan — see if it actually saves money.
Consolidation saves you
$18,988
Consolidation only wins if you don't run the cards back up. Close them or freeze them after consolidating.
Debt consolidation rolls several credit card balances into a single new loan or card, ideally at a lower rate, so you make one payment instead of many. It does not erase what you owe. It only changes the interest rate and schedule on that debt.
The whole question is whether the new rate beats what you are paying now. This calculator adds up your current balances, finds your blended (weighted-average) APR, and compares that against the rate and any fees on the consolidation option you are considering.
Consolidation helps most when your credit qualifies you for a meaningfully lower rate and you actually stop adding new charges to the paid-off cards. If neither is true, you can end up paying longer and more.
How this calculator works
First the tool computes your blended APR: multiply each card's balance by its APR, add those products together, then divide by your total balance. For example, $4,000 at 24% and $2,000 at 18% gives (4000 x 0.24 + 2000 x 0.18) / 6000 = ($960 + $360) / $6,000 = 22% blended. It then models the new loan: a fixed personal-loan payment is calculated from the principal, the new monthly rate (APR / 12), and the term, so total interest equals all payments minus the amount borrowed. Any origination fee or balance-transfer fee is added on top. Consolidation saves money only when the new APR plus fees produces less total cost than paying your existing balances at the blended 22% on their current schedule.
What affects the number
- New APR vs. blended APR: a personal loan at 12% clearly beats a 22% blended rate; a loan at 21% barely moves the needle after fees.
- Fees: personal loans often carry a 1-8% origination fee; balance-transfer cards typically charge 3-5% of the amount moved. Fold these into the comparison.
- Loan term: a longer term lowers the monthly payment but can raise total interest, so a lower rate over more years is not automatically cheaper.
- The two common vehicles: a fixed-rate personal loan (predictable payoff date) or a 0% intro-APR balance-transfer card (cheapest if you clear it before the promo ends).
- Credit score: the advertised low rates go to strong credit; a thin or damaged file may only qualify for a rate close to what you already pay.
- Behavior: consolidation backfires if you run the old cards back up, turning one debt into two.
Frequently asked questions
Does debt consolidation hurt your credit score?
There is usually a small, temporary dip from the hard inquiry and the new account lowering your average account age. Over time, paying the balance down and lowering your credit utilization often helps the score more than the initial dip hurt it. Missing payments on the new loan, however, will damage it.
Is a personal loan or a balance transfer better for consolidation?
A 0% balance-transfer card is cheapest if you can repay the full balance before the promo window ends, since you pay only the transfer fee. A fixed-rate personal loan is better for larger balances or longer payoff timelines because the rate is locked and you get a firm end date. Compare the transfer fee against the loan's total interest for your specific numbers.
How do I calculate my blended interest rate?
Multiply each balance by its APR, add those results, then divide by the sum of all balances. A $3,000 balance at 26% and a $1,000 balance at 15% give (780 + 150) / 4000 = 23.25%. That blended rate is the benchmark any consolidation offer has to beat.
When does consolidation NOT save money?
When the new rate is not meaningfully lower than your blended APR, when fees eat up the interest savings, or when a longer term means you pay more total interest despite a smaller monthly payment. It also fails if you keep charging on the cards you just paid off.
This calculator provides general estimates for educational purposes only and is not financial advice. Your actual costs and credit outcomes depend on your specific card terms, issuer, and situation.