Debt Consolidation Loan Calculator

Debt Consolidation Loan Calculator

Debt consolidation combines multiple debts into a single loan with potentially lower interest.

What This Calculator Shows

• Monthly Payment: Your expected payment amount based on loan terms
• Total Interest: The cost of borrowing over the loan lifetime
• Amortization Schedule: How payments split between principal and interest
• Payment Breakdown: Visual representation of your loan costs

How to Calculate

1. Enter your loan amount 2. Input the interest rate (APR) 3. Select the loan term 4. Review your payment details and total costs

Key Considerations for Debt Consolidation Loan

• Compare offers from multiple lenders before committing
• Understand all fees including origination, closing costs, and prepayment penalties
• Consider how rate changes might affect your payments (for variable rates)
• Factor in your overall financial goals and debt-to-income ratio

Consolidation replaces several debts with one. It lowers the payment; whether it lowers the *cost* depends entirely on the term.

	Before	After consolidation
Balance	$25,000 across 4 cards	$25,000
Rate	22% average	12%
Term	~3 years at current payments	5 years
Monthly	$954	$556
Total interest	$9,340	$8,367

That is a genuine saving. Stretch the same loan to 7 years and total interest rises to $11,900 — more than the debt it replaced, despite the lower rate.

The failure mode is behavioural, not financial: cards paid off by a consolidation loan have available balances again. Roughly half of consolidators carry a card balance again within two years, ending up with both debts.

The Numbers This Page Opens With

The calculator above starts at $25,000 over 5 years at 12%, which is representative for this product:

Monthly payment	$556
Total repaid	$33,367
Total interest	$8,367
Interest as a share of principal	33%

Change any input above and every figure recalculates. The amortisation formula behind it:

`` M = P × [ r(1+r)^n ] / [ (1+r)^n − 1 ]

P = principal, r = monthly rate (annual ÷ 12), n = number of payments ``

Before You Sign

• Compare APR, not the rate. APR includes origination and points; the rate does not.
• Ask about prepayment penalties. They turn a plan to pay early into a fee.
• Rate-shop inside 14 days. Credit scoring models treat multiple mortgage or auto

enquiries in that window as one enquiry.

• Check whether the payment includes escrow. A mortgage quote without taxes and insurance

understates the real monthly cost by hundreds.

Where the Money Goes

On $25,000 at 12% over 5 years, paying $556 a month:

Point	Principal repaid	Interest paid	Balance
Year 1	$1,883	$1,453	$23,117
Year 1	$4,927	$3,414	$20,073
Year 3	$10,648	$6,035	$14,352
Year 4	$17,289	$7,736	$7,711
Year 5	$25,000	$8,367	$0

Early payments are mostly interest. That is not a fee structure — it is arithmetic: interest accrues on the outstanding balance, which starts at its largest. It is also why an extra payment made early saves far more than the same payment made late.

What a Rate Change Costs

Rate	Monthly	vs 12%	Total repaid
11.00%	$544	-$13	$32,614
11.50%	$550	-$6	$32,989
12.00%	$556	—	$33,367
12.50%	$562	+$6	$33,747
13.00%	$569	+$13	$34,130

Half a percentage point moves the monthly payment by $6 and the total by $380. Shopping three lenders usually beats any amount of negotiating on price.