Consolidation Loan Comparison Calculator

This consolidation loan comparison calculator estimates the monthly payment and total interest on a fixed-rate loan using its amount, APR, and term. Enter the proposed loan’s figures to see its payment and interest under the stated assumptions; compare that estimate with separate debts only after gathering their balances, rates, payments, and remaining terms.

Formula

For a fixed-rate loan with equal monthly payments, the payment is calculated from the loan principal, monthly interest rate, and number of payments:

Payment = round[P × r ÷ (1 − (1 + r)⁻ⁿ), 2]

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

The calculator then estimates total interest as monthly payment × n − P. It uses the monthly payment rounded to cents, so the interest estimate reflects that rounded payment multiplied across the full term. Actual final payments and lender totals can differ because of payment dates, rounding conventions, fees, or other contract terms.

Worked Example

Using the calculator’s default inputs—$20,000 principal, 8% APR, and a 5-year term:

1. Convert the APR to a monthly decimal rate: 8 ÷ 1,200 = 0.0066667.
2. Find the payment count: 5 × 12 = 60 months.
3. Substitute into the payment formula: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰] = $405.53 per month, rounded to cents.
4. Estimate total interest using the displayed payment: $405.53 × 60 − $20,000 = $4,331.80.

These figures describe the entered loan only. They do not show whether combining existing debts changes the borrower’s overall costs.

Assumptions

• The APR and payment remain fixed for the full term.
• Payments are equal, made monthly, and start on schedule; the calculation does not model unusual first or final payment dates.
• Interest is compounded monthly using APR ÷ 12.
• Fees, taxes, insurance, escrow, and other charges are not included. Add any lender-provided costs separately when comparing total borrowing costs.

How to Compare Consolidation Loans

A consolidation loan replaces multiple debts with one new loan. A payment estimate is one useful comparison, but it is not the whole comparison: a longer term can lower the monthly payment while increasing total interest, and fees can offset apparent savings. The calculator needs the offered loan’s actual principal, APR, and term. Ask the lender for those figures and any required charges rather than treating the example inputs as market data.

For a meaningful side-by-side review, collect these details for each existing debt and the proposed loan:

• Current payoff balance, not just the original amount borrowed.
• APR and whether it is fixed or can change.
• Required monthly payment and remaining payment count or payoff date.
• Fees or charges connected with paying off or opening the loans.
• Whether the new loan has different payment timing or other terms that affect the amount due.

Then compare the proposed payment with the combined current payments, and compare total remaining payments and costs over an equivalent period. Do not compare a five-year total with a longer period of existing payments without making the time periods clear. A lower monthly payment alone does not establish a lower total cost.

Reading the Results and Common Problems

“Monthly payment” is the estimated amount for principal and interest on the modeled loan. “Total interest” is the amount above the borrowed principal over the term, based on the rounded payment. Neither output is a lender quote or a full payoff statement. If a loan charges an upfront fee that is added to the amount borrowed, include it in the principal only if that matches the proposed contract.

Several comparison mistakes can lead to misleading conclusions:

• Using the wrong balance: a statement balance may differ from the amount needed to pay off a debt on a particular date. Request a current payoff figure.
• Ignoring term length: spreading repayment over more months can reduce the payment but leave interest accruing longer.
• Comparing APRs without costs: APR and interest rate are not always interchangeable in loan disclosures. Review the lender’s stated APR and itemized charges.
• Assuming all rates are fixed: a variable-rate debt can change over time, while this calculator models a constant rate.
• Rounding intermediate values: the calculator rounds the payment to cents, then uses that rounded payment for total interest. Independently rounding the monthly rate or payment count may produce a small difference.

Limits and Alternatives

This calculator is suited to a single fixed-rate loan with level monthly payments. It does not model multiple loans, promotional rates, variable rates, irregular payments, late charges, prepayment penalties, or payoff timing. For debts with different terms, calculate each remaining schedule separately or use lender payoff information; the comparison here cannot infer those details from a single combined balance.

Other ways to organize repayment include continuing separate payments, asking creditors about payment arrangements, or using a structured repayment plan. Each has different terms and potential costs; this calculator does not evaluate eligibility or predict effects on credit. A consolidation loan also does not erase the underlying debt: it changes the repayment contract, and continued borrowing on accounts that were paid off can increase total debt.

Use the result as a consistent arithmetic estimate, then verify the complete payment schedule and all charges in the lender’s disclosure. This is educational calculation, not financial advice. The result is an estimate, and the lender’s disclosure gives the exact figures.

Frequently Asked Questions

What does a consolidation loan comparison calculator show?
It estimates the monthly principal-and-interest payment and total interest for one fixed-rate loan from its amount, APR, and term. It does not automatically compare multiple debts or include fees.

Does a lower monthly payment mean I will pay less overall?
No. A longer repayment term can produce a lower monthly payment while increasing total interest. Compare the full repayment period and charges, not only the monthly amount.

Should I include fees in the loan amount?
Only if the proposed loan adds those fees to the balance. Otherwise, keep the principal as quoted and account for fees separately when reviewing total costs.

Why might my lender’s payment differ from this estimate?
The lender may use different payment dates, rounding, a different APR or term, or charges not modeled here. The contract and disclosure specify the actual figures.

Can this calculator compare variable-rate loans?
No. It assumes the entered APR stays fixed throughout the loan. A variable rate can change, so its future payment and interest cannot be represented by this fixed-rate estimate.

Related

• Personal Loan Installment Calculator and Payment Formula
• Quick Installment Loan Payment Calculator
• Online Installment Loan Rates: How APR Affects Payments

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 | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2