# Debt consolidation calculator

> Debt consolidation calculator: compare your debts with one loan — monthly payment, total interest, payoff time, APR with fees and the break-even rate.

Interactive version: https://www.calcopenly.com/finance/debt-consolidation-calculator
Subject: Finance calculators

Two plans are run month by month. Now: each debt accrues its APR ÷ 12 and takes its own payment, and when a debt is cleared its payment moves to the highest-rate debt left. Consolidated: one loan repaid by M = L × r × (1 + r)^n ÷ ((1 + r)^n − 1). When the origination fee comes out of the loan, you borrow the debts ÷ (1 − fee) to receive enough to clear them. The saving is the total paid now minus the loan's payments and any cash added.

With the defaults, three debts totaling 16,900 at 560 a month take 45 months and 7,996.16 of interest. A 48-month loan at 11.99% with a 5% fee borrows 17,789.47, costs 468.38 a month and saves 2,414.03. Its APR with the fee is 14.77% against a combined 22.09% on the debts, and it saves money at any rate below 17.58%.

Rates are held fixed, and cleared cards are assumed to carry no new balances. Promotional balance-transfer rates are not modeled.

## Inputs

- **Debts**: One per line: name (optional), balance, rate (% per year), monthly payment. Leave out thousands separators.
- **Roll over freed payments**: When a debt is repaid, its payment moves to the highest-rate debt left, so your total monthly payment stays the same. Turn off if each payment stops when its debt is repaid.
- **Loan interest rate**
- **Loan term**
- **Origination fee**: Percent of the loan amount.
- **Fee paid** (options: Out of the loan, In cash)
- **Loan amount**: Leave blank to borrow exactly what clears the debts after the fee.

## Results

- Saved by consolidating — main result
- Loan payment
- Current monthly payments
- Months to repay the loan
- Months to clear current debts
- Interest on the loan
- Interest on current debts
- Loan APR including the fee
- Combined APR of current debts
- Origination fee
- Loan amount
- Break-even loan rate
- Monthly payment difference
- Cash you add at closing

## Formula

$$
L = \frac{\sum B_i}{1 - f},\quad M = \frac{L\,r\,(1+r)^n}{(1+r)^n-1},\quad \text{saved} = \sum_{\text{current}} \text{payments} - (nM + \text{cash added})
$$

## Worked examples

### Three cards against a 25,000 loan at 10.99%

- Debts: Credit card 1, 10000, 17.99, 260 / Credit card 2, 7500, 19.99, 190 / High interes…
- Roll over freed payments: yes
- Loan interest rate: 10.99%
- Loan term: 60 months
- Origination fee: 5%
- Fee paid: Out of the loan
- Loan amount: 25,000
- **Loan payment: 543.44**
- **Interest on the loan: 7,606.15**
- **Months to clear current debts: 59**
- **Combined APR of current debts: 18.92%**
- **Loan APR including the fee: 13.25%**
- **Origination fee: 1,250.00**
- **Cash you add at closing: 250.00**
- Checked against: Calculator.net debt consolidation calculator, published output for its defaults (fetched 2026-09-26): 543.44 a month, 7,606.15 interest, 59 months, APR 18.92% vs 13.25%, 250 upfront

### 48-month loan at 11.99%, 5% fee from the loan

- Debts: Credit card, 8500, 23.99, 255 / Store card, 2400, 29.99, 95 / Personal loan, 6000…
- Roll over freed payments: yes
- Loan interest rate: 11.99%
- Loan term: 48 months
- Origination fee: 5%
- Fee paid: Out of the loan
- **Saved by consolidating: 2,414.03**
- **Loan payment: 468.38**
- **Loan amount: 17,789.47**
- **Origination fee: 889.47**
- **Months to clear current debts: 45**
- **Interest on current debts: 7,996.16**
- **Loan APR including the fee: 14.77%**
- **Combined APR of current debts: 22.09%**
- **Break-even loan rate: 17.58%**
- Checked against: Python decimal (prec 50) month-by-month simulation of the debts with rollover, annuity formula for the loan, bisection for the APRs and break-even rate

### Payments stop as each debt is cleared

- Debts: Credit card, 8500, 23.99, 255 / Store card, 2400, 29.99, 95 / Personal loan, 6000…
- Roll over freed payments: no
- Loan interest rate: 11.99%
- Loan term: 48 months
- Origination fee: 5%
- Fee paid: Out of the loan
- **Months to clear current debts: 56**
- **Interest on current debts: 8,488.12**
- **Saved by consolidating: 2,905.99**
- Checked against: Python decimal month-by-month simulation without rollover

### Fee paid in cash

- Debts: Credit card, 8500, 23.99, 255 / Store card, 2400, 29.99, 95 / Personal loan, 6000…
- Roll over freed payments: yes
- Loan interest rate: 11.99%
- Loan term: 48 months
- Origination fee: 5%
- Fee paid: In cash
- **Loan amount: 16,900.00**
- **Origination fee: 845.00**
- **Cash you add at closing: 845.00**
- **Loan payment: 444.96**
- **Saved by consolidating: 2,693.14**
- **Loan APR including the fee: 14.77%**
- Checked against: Python decimal: loan equals the 16,900 of debts, 5% fee added as cash, annuity payment at 11.99%/12 over 48 months

### A long loan with a high fee costs more

- Debts: Card, 5000, 9, 250
- Roll over freed payments: yes
- Loan interest rate: 7.5%
- Loan term: 60 months
- Origination fee: 8%
- Fee paid: Out of the loan
- **Saved by consolidating: -1,096.35**
- **Loan payment: 108.90**
- **Months to clear current debts: 22**
- **Loan APR including the fee: 11.08%**
- **Break-even loan rate: 0.02%**
- Checked against: Python decimal: 5,000 at 9% paid 250 a month clears in 22 months with 437.76 interest; the 8% fee alone is 434.78

### Interest-free debts and loan

- Debts: A, 3000, 0, 100 / B, 3000, 0, 100
- Roll over freed payments: yes
- Loan interest rate: 0%
- Loan term: 30 months
- Origination fee: 0%
- Fee paid: Out of the loan
- **Saved by consolidating: 0.00**
- **Months to clear current debts: 30**
- **Loan payment: 200.00**
- **Combined APR of current debts: 0.00%**
- **Loan APR including the fee: 0.00%**
- **Interest on current debts: 0.00**
- Checked against: Hand calculation: 6,000 at 200 a month either way takes 30 months with no interest

## Questions

### Is debt consolidation worth it?

Only if the loan's interest and fees come to less than the interest you would pay on the debts at your current payments. The three default debts, 16,900 in all, cost 7,996.16 of interest over 45 months. A 48-month loan at 11.99% with a 5% fee costs 4,692.66 of interest plus 889.47 of fee, saving 2,414.03 and lowering the payment by 91.62 a month.

### Does a longer consolidation loan save more money?

No. A longer term lowers the payment but adds interest. For the default debts at 11.99% with a 5% fee, 36 months costs 590.78 a month and saves 3,628.08; 48 months costs 468.38 and saves 2,414.03; 60 months costs 395.63 and saves 1,158.53; 72 months costs 347.70 and loses 137.89. The CFPB warns that paying over a longer time could mean paying a lot more overall.

### How does an origination fee change the cost of a consolidation loan?

It raises the amount you borrow and the APR. To receive 16,900 when a 5% fee is taken from the loan, you borrow 16,900 ÷ 0.95 = 17,789.47, and the APR rises from 11.99% to 14.77% because the fee counts as a prepaid finance charge. With no fee the default loan saves 3,538.14; with 5% it saves 2,414.03; with 8% it saves 1,680.92.

### What is the break-even interest rate for debt consolidation?

The loan rate at which consolidating costs exactly what keeping the debts would. Below it you save; above it you lose. For the default debts with a 5% fee, the break-even rate is 23.32% for a 36-month loan, 17.58% for 48 months, 14.11% for 60 months and 11.78% for 72 months, which is why the 72-month loan at 11.99% costs more.

### Why is my combined APR different from the average of my rates?

The combined APR is the single rate that turns your actual payment stream into the total you owe, so it weights each debt by how long its balance stays unpaid. The default debts carry 23.99%, 29.99% and 14.5%, a balance-weighted average of 21.47%; paid at 560 a month with payments moving to the highest rate, they behave like one loan at 22.09%. Compare that figure with the loan's APR including fees.

### How accurate is the debt consolidation calculator?

Accuracy depends on your inputs and the method's assumptions. Decimal arithmetic uses 50 significant digits, but estimates, numerical methods and source data can be less precise; the displayed rounding does not remove those limits. It is checked against 6 worked examples whose answers come from independent sources; for example, “Three cards against a 25,000 loan at 10.99%” is checked against Calculator.net debt consolidation calculator, published output for its defaults (fetched 2026-09-26): 543.44 a month, 7,606.15 interest, 59 months, APR 18.92% vs 13.25%, 250 upfront.

### Where does the method come from?

Consumer Financial Protection Bureau — What do I need to know about consolidating my credit card debt?; Regulation Z, 12 CFR 1026.4 and 1026.22 — Finance charge and annual percentage rate; Microsoft Excel RATE function (APR from payment and amount received).

## Sources

- [Consumer Financial Protection Bureau — What do I need to know about consolidating my credit card debt?](https://www.consumerfinance.gov/ask-cfpb/what-do-i-need-to-know-about-consolidating-my-credit-card-debt-en-1861/)
- [Regulation Z, 12 CFR 1026.4 and 1026.22 — Finance charge and annual percentage rate](https://www.consumerfinance.gov/rules-policy/regulations/1026/22/)
- [Microsoft Excel RATE function (APR from payment and amount received)](https://support.microsoft.com/office/rate-function-9f665657-4a7e-4bb7-a030-83fc59e748ce)

_Note: financial information, not professional advice._