Is debt consolidation worth it?

When three things line up: the loan APR beats your blended rate, the fee does not eat the savings, and the old accounts stay at zero afterward. This calculator checks the first two against your real numbers. The third is behavioral, and it is where consolidation most often fails.

Does debt consolidation hurt your credit score?

Usually a small short-term dip from the hard inquiry and the new account, often followed by an improvement: an installment loan paying off revolving balances cuts your credit utilization, which is a heavier scoring factor. Keeping the old cards open at zero preserves your utilization denominator and account age.

What rate do I need for consolidation to make sense?

Meaningfully below your blended APR after fees. As a rough rule, a loan APR several points under your weighted-average card rate clears a typical 1 to 8 percent origination fee within a few years; a loan within a point or two of your blended rate rarely does. The blended-APR output above is your personal benchmark.

Should I use a personal loan or a balance transfer card?

Balance transfer cards offer 0 percent windows (commonly 12 to 21 months) for a 3 to 5 percent transfer fee, which beats any loan if you can clear the balance inside the window. A loan wins for larger balances and longer runways because the rate is fixed and the term forces payoff. Some people split the debt across both.

What happens if I keep using the cards after consolidating?

You end up with the loan payment plus new card balances, the double-debt trap that gives consolidation its bad name. The loan only refinances the past; the budget fixes the future. Freezing or removing the cards from online wallets until the loan is gone is the boring, effective move.

Debt Consolidation Calculator

Compare a consolidation loan against your current debts: interest saved or lost, the payment change, and the blended APR you are actually paying today.

X f in

Saved by consolidating

$4,921.84

Consolidation loan payment: $319.45
Current minimums (total): $310.00
Monthly payment change: -$9.45
Current-path interest: $8,255.49
Loan interest plus fee: $3,333.65
Current path: 66 months
Loan term: 48 months
Blended APR today: 21.00%
Origination fee: $360.00

Quick answer: With the example inputs this page loads by default, the headline result (Saved by consolidating) comes to $4,921.84. Compare a consolidation loan against your current debts: interest saved or lost, the payment change, and the blended APR you are actually paying today. Change any input above and every figure updates instantly in your browser.

Your inputs never leave your browser, and nothing is stored. See our privacy policy .

Fact-check: results on this page are verified against an independently coded reference oracle that covers all 106 calculators on this site. See how we verify .

Debt consolidation replaces several balances with one loan, and it wins only when the loan's rate and fee beat what you pay now. Rolling $12,000 of card debt at a blended 21 percent APR into a 11 percent loan over 48 months saves thousands of dollars of interest. This calculator runs your actual balances against a real loan offer, fee included, and shows both the savings and the payment change.

What this result means

The total-savings line is the verdict, and it counts the origination fee, which is where marginal consolidation offers quietly lose. A positive number with a similar or shorter payoff is a clear win; savings achieved only by stretching the term deserve suspicion, because a longer runway at a slightly lower rate can still cost more. The comparison assumes the old accounts stay at zero; running card balances back up after consolidating is the classic failure mode, and no rate fixes it. If the loan does not beat your current path, the avalanche method with extra payments is the free alternative. Not advice.

Assumptions

The current path holds your total monthly outlay at the sum of the minimums you enter, with each freed-up minimum rolling into the highest-rate remaining debt (the avalanche rollover, the same engine as the snowball vs avalanche calculator). That is the cheapest honest reading of "keep paying what I pay now"; real card minimums that shrink with the balance would cost more and take longer, making consolidation look better than shown.
The consolidation loan pays off the full debt on day one, with the origination fee financed on top of the balance, and amortizes at the fixed APR over the term (the shared amortization engine). Total savings compare current-path interest against loan interest plus the fee.
Up to three debts are supported, each with its own balance, APR, and minimum; a zero-balance slot is ignored. The blended APR is the balance-weighted average of your rates.
The comparison assumes no new charges on the old accounts after consolidating and no prepayment of the loan. Balance-transfer cards with promotional 0 percent windows are a different instrument and are not modeled.
This is an estimate for educational purposes only, not a loan offer, credit advice, or debt counseling. Nonprofit credit counseling (NFCC member agencies) is worth knowing about when the numbers will not work.

Key terms

Definitions for the terms this calculator uses, in our finance glossary .

Debt Consolidation

How it works

The comparison runs two futures for the same debts.

The current path. Your total monthly outlay stays at the sum of the minimums you enter, and as each debt clears, its freed-up minimum rolls into the highest-rate survivor (the avalanche rollover, computed by the same month-by-month engine as the snowball vs avalanche calculator). This is the cheapest honest reading of “keep doing what I am doing”; real card minimums that shrink as balances fall would cost more, so if anything this baseline understates consolidation’s advantage.

The loan path. The consolidation loan pays off the full balance on day one, with the origination fee financed on top, and amortizes at the fixed APR over the term via the shared amortization engine.

Total savings = current-path interest minus (loan interest + fee). The blended APR, your balances’ weighted-average rate, is the benchmark the loan has to beat, and the payment-change line shows whether consolidation also frees monthly cash or costs some.

Worked example

$12,000 across three debts ($6,000 at 22%, $4,000 at 18%, $2,000 at 24%, minimums totaling $310) against an 11 percent, 48-month loan with a 3 percent fee.

Blended APR today: 21 percent. Current path: 66 months and $8,255.49 of interest.
Loan: $12,360 financed (fee included), $319.45 a month, $2,973.65 interest + $360 fee = $3,333.65.
Consolidating saves $4,921.84, finishing 18 months sooner for $9.45 more per month.

Scope and limitations

Three debt slots; no new charges after consolidating; no loan prepayment; fee financed (a deducted fee leaves part of the debt unpaid and is not modeled); balance-transfer promotional windows are a different product. Credit-score effects and eligibility are outside the math. This is an estimate for education, not a loan offer or debt counseling; nonprofit counseling through NFCC member agencies exists for situations the math cannot fix.

Sources

Frequently asked questions

Is debt consolidation worth it?: When three things line up: the loan APR beats your blended rate, the fee does not eat the savings, and the old accounts stay at zero afterward. This calculator checks the first two against your real numbers. The third is behavioral, and it is where consolidation most often fails.
Does debt consolidation hurt your credit score?: Usually a small short-term dip from the hard inquiry and the new account, often followed by an improvement: an installment loan paying off revolving balances cuts your credit utilization, which is a heavier scoring factor. Keeping the old cards open at zero preserves your utilization denominator and account age.
What rate do I need for consolidation to make sense?: Meaningfully below your blended APR after fees. As a rough rule, a loan APR several points under your weighted-average card rate clears a typical 1 to 8 percent origination fee within a few years; a loan within a point or two of your blended rate rarely does. The blended-APR output above is your personal benchmark.
Should I use a personal loan or a balance transfer card?: Balance transfer cards offer 0 percent windows (commonly 12 to 21 months) for a 3 to 5 percent transfer fee, which beats any loan if you can clear the balance inside the window. A loan wins for larger balances and longer runways because the rate is fixed and the term forces payoff. Some people split the debt across both.
What happens if I keep using the cards after consolidating?: You end up with the loan payment plus new card balances, the double-debt trap that gives consolidation its bad name. The loan only refinances the past; the budget fixes the future. Freezing or removing the cards from online wallets until the loan is gone is the boring, effective move.

Related calculators

Learn how this works

New to this topic? Our companion guide explains it in plain language: Will a Balance Transfer Actually Save You Money?

By Sam Sage Last reviewed July 2026.