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Debt consolidation comparison

Will consolidation lower the total payment and interest cost?

Your numbers

$
$
%
%
yrs
$

Interest and fee saving

$1,946

Current payoff time4 yrs 3 mo
Current interest$7,775
Consolidated payoff time5 yrs
Consolidated interest and fee$5,829
New payment$401.31
Payment change-$118.69

Tip. A lower payment over a much longer term routinely costs more overall. Check both payoff times.

Assumptions

  • Current path: the blended APR applied to the whole balance with your current total payment held fixed until it clears.
  • New path: one amortizing loan for the same balance over the term you choose, with the fee added to its cost.
  • A positive saving can still come with a longer term. Check the payoff times before treating it as a win.
  • Ignores balance-transfer promotional rates, which change the answer materially.

Explore the numbers

Examples and charts

Start with a scenario, then read the response curve to see which input actually moves the answer.

Example 1

Clear rate improvement

A big rate drop over a similar timeframe, which is when consolidation genuinely helps.

Interest and fee saving

$3,117

Example 2

Lower payment, longer term

The same debt stretched to seven years, where the payment falls and the cost can rise.

Interest and fee saving

-$502

Example 3

Marginal rate gain

A small rate improvement that a consolidation fee can easily swallow.

Interest and fee saving

-$1,472

Sweeps consolidation apr from half to one and a half times your value, holding everything else fixed.

Response curve

How consolidation apr moves the result

Interest and fee saving

$1,946

-$1.0k$0$1.0k$2.0k$3.0k$4.0k$5.0k6.0%8.0%10%12%14%16%
Chart axis: Consolidation APRNow 11% → $1.9k

What this calculates

Checks whether rolling balances into a single new loan lowers total interest once the fee is counted, and shows what happens to the payment and the payoff date.

How to use it

  1. Start with current total balance and work down the form, or load an example to begin from a realistic case.
  2. Read the headline result alongside the supporting rows, which show the intermediate figures behind it.
  3. Check the assumptions. They decide what the number includes and, more importantly, what it leaves out.
  4. Sweep consolidation apr on the response curve to see how much it actually moves the answer.
  5. Run a cautious case as well as an optimistic one before using the estimate in a decision.

Common mistakes

  • Celebrating a lower payment while quietly extending the debt by years.
  • Overlooking an origination fee expressed as a percentage of the balance.
  • Consolidating unsecured debt into a loan secured against your home.

Formula

Compare interest on the current fixed-payment path against the new loan's interest plus fee

Inputs

  • Current total balance
  • Current total monthly payment
  • Current blended APR (%)
  • Consolidation APR (%)
  • Consolidation term (yrs)
  • Consolidation fee

FAQ

What if I keep using the old cards?

Then consolidation makes things worse, because you now carry the loan and a fresh balance. It only works if the cleared accounts stay cleared.

Will consolidating hurt my credit score?

Usually a small dip from the hard enquiry and the new account, followed by improvement as the card utilisation falls. Closing the old cards can hurt more than the loan helps, because it cuts available credit.

What about a 0% balance transfer instead?

Often cheaper if you can clear the balance inside the promotional window, after allowing for the transfer fee. If you cannot, the rate that applies afterwards is usually worse than a personal loan.

Why does the result say the comparison is not possible?

Because your current payment does not cover the interest on the current balance, so the existing debt never clears and there is no finite cost to compare against.

Are these numbers financial advice?

No. They are educational estimates based on the inputs and assumptions on this page. Confirm important decisions with a qualified professional and your own documents.

Read the full guideDebt consolidation guide

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