Compare your current debt payments vs consolidation. See how much you can save by consolidating your debts into one loan.
| Metric | Current | Consolidated | Difference |
|---|---|---|---|
| Monthly Payment | $- | $- | - |
| Total Interest | $- | $- | - |
| Total Payment | $- | $- | - |
| Time to Payoff | - | - | - |
Add debts to see summary
Result = Financial inputs processed using the applicable rate, payment, compounding or cash-flow relationship shown by this calculator.The calculator applies the entered principal or balance, periodic interest rate, repayment term and any supported fees or extra payments. Payment and interest figures depend on compounding frequency, payment timing and which taxes, insurance or charges are included.
The Debt Consolidation Calculator provides a quick estimate of what the payments and cost of borrowing could look like for your debt if it were all combined into a new consolidation loan. Fill in your details about the debt that will be consolidate, along with terms of the potential consolidation loan, and let the Debt Consolidation Calculator do the rest. You could have estimates on new monthly payment amount, total payment amounts, and the total cost including interest, giving you the figures to decide if consolidating is the way forward. These are estimates and figures used for planning and comparison; no offer to lend will be made and actual rates and payment amounts may vary.
Enter accurate information about your existing debts and the consolidation loan you are considering.
It is important to enter correct figures as a tiny alteration to the interest rate, term, balance or fee could significantly alter the estimated payment and amount borrowed.
This calculator helps predict the expense of paying off a variety of debts with one single consolidation loan. The calculator will provide you with the projected monthly payments based on the requestedloan amounts, interest rate and repayment terms (once enough of the information is entered) comparing them to what you are already paying:
The goal is to answer two distinct questions: What could the new payment be? And How much could the new loan cost in total interest payments if paid back entirely? Remember that it isn't necessarily the same as above, due to extended payments of longer-term loans being lower in price month to month but ultimately costing you a little more.
For a standard fixed-rate amortizing consolidation loan, the estimated monthly payment can be calculated with the following formula:
M = P × [r(1 + r)n] ÷ [(1 + r)n − 1]
Where, the annual rate of interest is given in percentages then it may be used as the annual rate of interest divided by 12.
Estimated total repayment can then be calculated as:
Total Repayment = Monthly Payment × Number of Payments
Total Interest = Total Repayment − Principal
This is for a standard amortizing loan. Some calculation method might vary for potential deals including variable rates, different payment structures, deferred interest, fees or unique contract provisions.
Assume you have several debts totaling $25,000 and are considering replacing them with a 5-year consolidation loan at a fixed annual interest rate of 9%.
Loan amount: $25,000
Annual interest rate: 9%
Monthly interest rate: 9% ÷ 12 = 0.0075
Loan term: 60 months
Using the standard amortizing payment formula, the estimated monthly payment is approximately $518.96.
Estimated total repayment: $518.96 × 60 = approximately $31,137.60
Estimated interest: approximately $6,137.60
This is an illustration to show the projected loan amount and total repayment. However, in order to evaluate if consolidating these debts will really save you money in the long term, you would need to run similar comparison tests to account for balances, interest rates, amortization, schedules and loan fees on existing debts.
The calculator may produce several results that should be reviewed together.
Reducing a monthly amount does not necessarily mean a cheaper loan. You’re sometimes given an option that has a longer term (for instance instead of 3-5 years you are given an 8-10 yr loan term) then your minimum payment becomes cheaper but you will pay a huge difference in total interest charges over time.
The comparison is about more than just monthly installments. The loans will likely carry different interest rates, minimum payment amounts and end dates. When consolidating, those will be restructured into a single repayment schedule.
When comparing the scenarios, consider the remaining amount owed, remaining interest cost, new interest rate, new loan term, and fees. This provides a clearer picture of the potential financial difference than comparing monthly payments alone.
The proposed interest rate is what the new loan will cost. The lower the interest rate, the less it can cost, although the length of the loan and any fees will play a part too.
Term The repayment term affects how long the monthly repayment period lasts. Longer terms will increase the length of the loan, decreasing the value of each month’s repayment.
The higher consolidation balance will provide a higher payment, all other things being equal (such as the interest rate and term length). Ensure you enter the loan values that represent the loans that you genuinely plan on consolodating.
Don't forget: Transaction, application, and/or loan origin fees can offset the final price. These can be rolled into your debt consolidation, which means that more money could be borrowed than you initially plan. It adds to your principal and can drive your overall interest costs up.
How much the consolidating loan saves you depends on how your underlying debts are consolidated. You should always compare what the remaining debt on your existing debt actually costs you, rather than the current amount of money that comes out of your wallet every month, to your new consolidating loan terms.
Compare a consolidation loan with the current loan duration For example, say the outstanding loans may be paid off in a year or two, but a consolidation loan will pay them out over significantly more years. This new loan would result in a lower monthly payment because it's spread over so many installments.
Interest does still accrue, however, over a longer payment term. Because of this, a consolidation product may not necessarily be beneficial in terms of immediate monthly cash flow even while adding to overall interest payments.
For this reason, review both monthly affordability and total repayment cost when interpreting the calculator's results.
Debt Consolidation calculator Used to predict the monthly payment and total debt costs you can expect if you combine your debts into one single loan. Can be used as a reference point to see how much you will be borrowing under an envisioned debt consolidation.
For a typical fixed rate amortizing loan, the payment amount can be computed with the principal, the monthly rate and number of months for the term on loan payment . Loan calculator makes this math with this formula and predict your new payment .
Yes, it is possible to pay off your old loan over less than your new loan’s loan term (the period of time you're repaying). While this decreases monthly loan payment amount it can lead to increase of the total interests.
No, you won't necessarily save money. Everything is going to be based on the new rate, the new loan terms, the charges you pay, and the outstanding balance of what you owe on the old accounts.
The rate on interest means rate applicable as charged on loan for a month or for a week or some day. While as for APR means its has accounted certain expenditure you should consider calculator and its own loan terms
Potential costs-such as the costs of initial loan fees, balance transfer fees or provider-specific fees-will vary depending on the product and lender, and should be reviewed before you proceed.
Enter the expected amount, rate and term, calculate a base case, then increase the rate or shorten the term. Compare the monthly payment and total interest to understand the trade-off between cash flow and borrowing cost.
While getting debt consolidation, you should compare the deal of the proposed loan against the total remaining on your current debts, rather than comparing just the monthly payments. A good comparison, would generally look a current totals, new estimated, interest left, new interest, loan fees, total amount of payment.
| Comparison | Existing Debts | Consolidation Loan |
|---|---|---|
| Total Balance | Combined outstanding balances | New amount financed |
| Interest Rate | May vary by account | Proposed new rate |
| Monthly Payment | Combined current payments | Estimated new payment |
| Repayment Period | Different for each debt | New loan term |
| Total Interest | Remaining interest across debts | Estimated interest on new loan |
| Fees | Existing account costs, if applicable | New loan or transfer fees |
Even where the interest rate of an arrangement on Consolidation is not lower than all of the debts included, you may find your Payment arrangement changes - although care should be taken over a higher rate as it will typically increase your overall borrowings costs, unless offset by other more favorable conditions of the new arrangement.
Use the calculator to compare the complete repayment cost, instead of simply assuming that replacing accounts with one payment makes the debt cheaper.
Existing debts may charge different interest rates and be applicable for varying APRs. For example, a credit card loan will have a completely different APR to another loan or card. when compared against any loan available, you have to take into account the proportions of the debts and multiply by the different rates; you will not get the same sum if you use a direct average.
A consolidation calculation is most useful when each balance and its applicable rate are entered accurately.
If the calculator features an input to enter additional monthly payment, testing varying payment amounts could suggest how raising monthly payment might affect your estimated repayment time and interest.
For example, compare the required payment to a larger one that matches your planned borrowing plan. The results might help show the effect of payment size on the loan schedule, but actual terms offered by the lender and rules for allocating payments need to be verified.
While a fixed-rate personal loan payment is straightforward once calculated, your future costs using credit card debt will vary along with your account rates and balances. For consolidating credit card balances, enter your balance at its current outstanding value with the interest rate reflecting your account with the information you enter.
Be sure you'll also ask yourself if you plan to keep these accounts and what additional purchases you'll make that'll increase your debt total once you're consolidated.
Your fixed interest rate consolidation loan, on average (as defined by your loan documentation) remain on that rate as detailed by the term. A variable product may change in terms and applicable reference rate.
If the loan on the calculator implies a rate will be static, it might not be a good approximation of a loan when the rate goes up. Look at the real loan document to understand how rates can change, how your payment might go up and what the ceilings are.
If a significant input is changed, always redo the calculation of your estimated consolidation cost. For example, the loan amount, offered interest rate, repayment term, fees, or the balances you are consolidating.
Similarly, work out a calculation from an assumed rate (that you did initially before finding out the loan details) and up date this when you get a full quote from your actual lender because the rate used may not match the previously assumed calculations.