Debt Consolidation Calculator
Calculate potential savings from consolidating multiple debts into a single payment with lower interest rates.
📋 Current Debts
🎯 Consolidation Loan Options
New Monthly Payment
$0
Monthly Savings
$0
Total Interest Savings
$0
Time to Payoff
-
Current vs. Consolidated Comparison
| Scenario | Monthly Payment | Total Interest | Total Payments | Payoff Time |
|---|---|---|---|---|
| Add debts and calculate to see comparison | ||||
Debt Payoff Strategies
Debt Avalanche
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Pay highest interest first
Debt Snowball
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Pay smallest balance first
Consolidation
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Single loan payment
Payment Schedule Preview
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| Calculate consolidation to see payment timeline | ||||
📋 Want to see the complete payment schedule?
Understanding Debt Consolidation
Benefits of Consolidation
- Lower Interest Rates: Potentially reduce overall interest costs
- Simplified Payments: One payment instead of multiple
- Fixed Terms: Predictable payoff timeline
- Improved Credit: Better payment history and utilization
- Reduced Stress: Easier debt management
Key Considerations
- Credit Score: Higher scores get better rates
- Loan Terms: Longer terms = lower payments but more interest
- Fees: Origination fees and closing costs
- Discipline: Avoid accumulating new debt
- Secured vs Unsecured: Different risk levels
Frequently Asked Questions
What is debt consolidation? +
Debt consolidation involves combining multiple debts into a single loan, typically with a lower interest rate. This simplifies payments and can reduce the total amount of interest paid over time.
Will debt consolidation hurt my credit score? +
Initially, applying for a consolidation loan may cause a small, temporary dip in your credit score due to the hard inquiry. However, consolidation can improve your score long-term by reducing credit utilization and helping you make consistent payments.
What types of debt can be consolidated? +
Most unsecured debts can be consolidated, including credit cards, personal loans, medical bills, and store cards. Secured debts like mortgages and auto loans typically cannot be included in debt consolidation.
How do I qualify for a debt consolidation loan? +
Qualification typically depends on your credit score, debt-to-income ratio, employment history, and income stability. Generally, you'll need a credit score of 580+ and a debt-to-income ratio below 40-50%.
Should I choose debt consolidation or debt settlement? +
Debt consolidation is generally better for your credit score as you pay debts in full. Debt settlement involves paying less than owed and significantly damages credit. Choose consolidation if you can qualify and afford payments.
What's the difference between debt consolidation and balance transfer? +
Balance transfers move debt to a credit card (often with 0% intro APR), while debt consolidation uses a personal loan. Balance transfers are good for short-term savings, while consolidation loans offer fixed terms and payments.
How long does debt consolidation take? +
The application and approval process typically takes 1-7 business days. Once approved, funds are usually disbursed within 1-3 business days. Some lenders may pay creditors directly, which can take additional time.
What happens if I can't make consolidation loan payments? +
Missing payments will damage your credit score and may result in late fees. Contact your lender immediately if you're having trouble - they may offer hardship programs or payment modifications.