Consolidated Debt Loan Comparison Calculator

This consolidated debt loan comparison calculator estimates the monthly payment and total interest on a single fixed-rate loan used to combine debts. Enter the proposed loan amount, APR, and term to see those figures; compare them with the balances, payments, and costs of the debts you may consolidate.

Formula

The calculator treats the consolidated balance as one fully amortizing loan with equal monthly payments and a fixed APR. It calculates the monthly payment using:

Payment = P × r ÷ [1 − (1 + r)⁻ⁿ]

• P is the loan amount in dollars.
• r is the monthly interest rate, calculated as APR ÷ 1,200. APR is entered as a percentage per year.
• n is the number of monthly payments, calculated as years × 12.

Total interest is estimated as monthly payment × number of payments − loan amount. The displayed payment is rounded to cents, and the interest calculation uses that rounded payment. The formula assumes payments are made monthly and that interest accrues at a constant monthly rate.

Worked Example

Using the defaults—$20,000, an 8% APR, and a five-year term:

1. Monthly rate: 8 ÷ 1,200 = 0.0066667.
2. Number of payments: 5 × 12 = 60.
3. Payment: $20,000 × 0.0066667 ÷ [1 − (1 + 0.0066667)⁻⁶⁰] = $405.53 per month, rounded to the nearest cent.
4. Total of rounded payments: $405.53 × 60 = $24,331.80.
5. Estimated total interest: $24,331.80 − $20,000 = $4,331.80.

Assumptions

• The APR and payment amount remain fixed for the full term.
• Payments are equal monthly payments, made at the end of each monthly period.
• Interest compounds monthly at APR divided by 12.
• Fees, taxes, insurance, and other charges are not included; the calculator also does not model the interest or payment schedules of debts being replaced.

How to Compare Consolidation With Existing Debts

A lower monthly payment alone does not establish that consolidation reduces the overall cost. A longer repayment term can lower the payment while increasing the total interest paid. To make a useful comparison, collect the current payoff balance, APR, required payment, and remaining repayment period for every debt included. Add any costs associated with the proposed loan using figures supplied in its disclosure, rather than assuming they are zero.

For an apples-to-apples comparison, look at both the expected monthly outflow and the amount paid over the repayment period. The calculator’s total interest is not a complete loan cost when fees apply, and it cannot calculate the current debts’ remaining interest. Those figures must be obtained from account statements or creditor payoff information and evaluated separately.

• Monthly payment: Compare the new estimated payment with the combined payments currently due. This shows cash-flow impact, not total savings.
• Repayment time: Compare the proposed term with how long the existing balances would take to repay if payments continued as planned.
• Total cost: Consider all scheduled payments and applicable charges over the full term, not only the interest rate or first payment.
• Debt included: Confirm that the proposed amount covers the balances intended for consolidation. A smaller amount would leave some debts outside the new loan.

What Consolidated Debt Loans Do—and Do Not Do

Debt consolidation combines multiple balances into one new borrowing arrangement. If the proceeds pay off the included accounts, the borrower then makes payments under the new loan’s terms. Consolidation changes how the debts are repaid; it does not erase the amount owed. The total borrowed may also differ from the sum of current balances if fees are added or if the payoff amounts change.

A personal loan is one possible structure, but the phrase “consolidated debt loan” does not by itself specify the loan type, rate structure, fees, or repayment terms. Some borrowing arrangements can have variable rates or other terms that a fixed-rate calculator cannot represent. Use the actual proposed terms and check the disclosure for how the rate, payment, and charges are defined.

Costs, Limitations, and Common Mistakes

This calculator is an estimate for a fixed-rate loan with regular monthly payments. It does not determine whether an application will be approved, forecast future rates, or assess a person’s finances. It also cannot establish whether consolidation reduces cost without information about the existing debts and any new-loan charges.

• Comparing APR with interest alone: APR and the note rate may be presented differently, and loan disclosures may include charges in the APR calculation. Use the lender’s quoted figures consistently and check what is included.
• Ignoring fees: An origination charge or other cost can affect the amount received, the amount borrowed, or the total paid. Enter the amount that actually applies to the proposed loan and account for costs separately if they are not financed.
• Choosing a longer term based only on the payment: More monthly payments can increase total interest even when each payment is lower.
• Using an inaccurate balance: A statement balance may not equal a payoff quote on the date a debt is paid. Verify payoff figures with the account provider.
• Rounding: The payment is rounded to cents, so a final payment may differ slightly in an actual amortization schedule. The model applies the rounded payment for every month.

To compare a variable-rate loan or a loan with irregular payments, a simple fixed-rate formula is not enough. Review the payment schedule and rate-adjustment terms supplied for that specific product.

Frequently Asked Questions

Does consolidating debt reduce the amount I owe?
No. Consolidation replaces or combines repayment obligations; it does not automatically reduce the principal. The new balance depends on the payoff amounts and any costs included in the borrowing.

Can a lower monthly payment cost more overall?
Yes. A longer term can spread repayment over more months and increase total interest, even when the monthly payment is lower. Compare total payments and applicable charges as well as the monthly amount.

Does this calculator include fees?
No. It calculates principal and interest using the entered amount, APR, and term. Check the proposed loan disclosure for fees and determine whether they are paid separately or included in the amount borrowed.

What loan amount should I enter?
Use the proposed amount that would actually be borrowed, based on verified payoff balances and any charges financed into the loan. If some debts will remain outside it, do not include those balances in the calculator’s loan amount.

Is this result a lender’s payment quote?
No. The result follows the stated fixed-rate formula and does not include lender-specific details or all possible charges. The estimate is for educational arithmetic; the lender’s disclosure gives the exact figures.

The result is an estimate, and the lender’s disclosure gives the exact figures.

Related

• Non-Installment Loan Calculator and Explanation
• Online Installment Loan Payment Calculator
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in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2