Debt Consolidation Calculator
Combine multiple debts into a single consolidation loan and compare your current payments against a consolidated loan. Calculate monthly savings, total interest, and payoff timeline with interactive charts for India, US, and UK.
About This Calculator
Debt consolidation combines multiple debts into a single loan, often at a lower interest rate. This calculator helps you compare your current debt payments against a consolidated loan to see potential savings, a new monthly payment, and how long it will take to become debt-free.
To use the calculator, enter each debt you wish to consolidate: the outstanding balance, the annual interest rate, and the minimum monthly payment. Then specify the interest rate and term in months for your consolidation loan. The calculator compares your current total payments against the consolidated scenario and displays the difference.
The results include your consolidated monthly payment, total savings over the loan term, total interest paid in each scenario, and an interactive payoff timeline chart. The breakdown table shows a side-by-side comparison of current versus consolidated costs.
Regional Notes
- India: Debt consolidation loans are available from banks like HDFC, ICICI, and SBI at interest rates typically ranging from 10% to 18%. Unsecured personal loans are commonly used for consolidation. Balance transfer on credit cards at 0-1% for 6-12 months is also popular. Default consolidation term is 60 months.
- US: Major lenders like Wells Fargo, Discover, and SoFi offer debt consolidation loans. Rates typically range from 6% to 24% AP. Balance transfer credit cards with 0% intro APR for 12-18 months are common. Debt management plans through nonprofit credit counseling agencies are also available. Default consolidation term is 60 months.
- UK: Debt consolidation loans are offered by high street banks (Barclays, Lloyds, HSBC) and online lenders. Rates typically range from 3% to 25%. Debt management plans (DMPs) and individual voluntary arrangements (IVAs) are alternative options. Default consolidation term is 60 months.
This calculator is for illustrative purposes. Actual loan terms, interest rates, and fees vary by lender, credit score, and regional regulations. Consult a financial advisor for personalized debt management advice.
Frequently Asked Questions
What is debt consolidation?
Debt consolidation is the process of combining multiple debts into a single loan. This simplifies payments and may lower your interest rate, reducing your monthly payment and total interest over time.
How does debt consolidation save money?
Savings come from replacing high-interest debts (like credit cards at 20%+) with a single loan at a lower rate. Even a few percentage points can save thousands over the repayment period.
Does debt consolidation hurt your credit score?
Debt consolidation can cause a small, temporary drop in your credit score due to the hard inquiry from the new loan. However, making on-time payments can improve your score over time by lowering your credit utilization ratio.
What types of debt can be consolidated?
Common debts to consolidate include credit card balances, personal loans, medical bills, payday loans, and student loans. Secured debts like mortgages and auto loans are typically consolidated separately.
What is the difference between debt consolidation and debt settlement?
Debt consolidation combines your debts into a new loan you repay in full, while debt settlement negotiates with creditors to accept less than the full amount. Consolidation preserves your credit more than settlement does.
What fees should I watch for when consolidating debt?
Common fees include origination fees (1-8% of loan amount), balance transfer fees (3-5%), prepayment penalties, and closing costs. Always read the loan terms carefully before consolidating.