One Loan to Pay Off Personal Loans? Calculate the Payment

This calculator estimates the monthly payment and total interest for one fixed-rate loan used to pay off personal loans, based on the amount borrowed, APR, and term. Enter the proposed replacement loan’s figures; the results are estimates of its payment and interest, not a comparison with your existing debts.

Formula

The calculator applies the standard fixed-payment loan formula. It assumes monthly payments and a monthly rate equal to the annual percentage rate (APR) divided by 12.

• Monthly payment = P × r ÷ [1 − (1 + r)⁻ⁿ]
• Total interest = monthly payment × n − P
• P is the loan amount in dollars; r is the monthly interest rate, calculated as APR ÷ 1,200; and n is the number of monthly payments, calculated as years × 12.

The displayed payment is rounded to the nearest cent. Total interest uses that displayed, cent-rounded payment multiplied by the full number of payments, then subtracts the amount borrowed. Actual lender schedules may differ because of payment dates, rounding, fees, and other contract details.

Worked Example

Using the calculator’s defaults—$20,000 borrowed, 8% APR, and a five-year term:

1. Convert APR to a monthly rate: 8 ÷ 1,200 = 0.0066667.
2. Find the number of monthly payments: 5 × 12 = 60.
3. Apply the payment formula: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰] = approximately $405.53 per month.
4. Calculate interest using the rounded payment: $405.53 × 60 − $20,000 = $4,331.80.

For these inputs, the estimated monthly payment is $405.53 and total interest is $4,331.80.

Assumptions

• The interest rate is fixed for the full term.
• Payments are equal, monthly, and made at the end of each period.
• Interest compounds monthly at APR divided by 12.
• The calculation excludes origination or other fees, taxes, insurance, PMI, and escrow. It also does not include any charges on the debts being paid off.

What “One Loan to Pay Off Personal Loans” Means

People often use this phrase to mean consolidating multiple personal loans into one new loan. The new lender’s funds are used to repay the old balances, leaving one scheduled payment if the payoff process is completed as intended. It may simplify bill management, but a single payment does not automatically mean lower borrowing costs or faster repayment.

This calculator models the proposed replacement loan by itself. To assess the arithmetic of a consolidation, compare its total expected payments and costs with the remaining payments and costs on every current loan. You need each balance, APR, remaining term, payment, and any payoff or new-loan fees. Do not compare only monthly payments: a longer term can lower the monthly amount while increasing total interest.

How to Compare the New Loan With Existing Debts

First establish the exact amount needed to pay off the existing balances. A balance shown on a recent statement may differ from the payoff amount, which can change with accrued interest or timing. Ask each current lender for a payoff figure and the date through which it applies. Include any charges that would be financed in the new principal when estimating the replacement payment.

• List each debt’s current payoff amount, APR, payment, and remaining schedule.
• Record the replacement loan’s actual APR, term, payment, and itemized fees from its disclosure.
• Compare total payments over the period you expect to keep the debt, not just the monthly payment.
• Check whether the quoted payment assumes automatic payments, optional products, or other conditions, and whether the rate can change.

For example, a $20,000 loan at the calculator’s default terms produces a $405.53 payment over 60 months. A lower payment on another offer could result from a longer term; it would not, by itself, show that the offer costs less overall. Use the actual terms and fee amounts rather than treating this example’s 8% APR as a market quote.

Costs, Timing, and Common Problems

Fees matter because they can increase the amount borrowed or reduce the value of consolidating. If a fee is deducted from loan proceeds, the amount available to pay creditors may be less than the stated loan amount. If it is added to principal, interest may accrue on it. Check the disclosure for the amount financed, funds disbursed, APR, payment schedule, and total of payments; these figures describe different things.

There can also be a timing gap between receiving funds and creditors posting payments. Confirm how the payoff will happen and keep making required payments on existing accounts until the creditors confirm the balances are cleared. Otherwise, a late payment or residual interest could remain. Once paid off, verify each account’s final balance rather than assuming a transfer has settled every debt.

Consolidation also does not erase debt or prevent new borrowing. If balances are paid off but new charges or borrowing replace them, total debt can grow. This is a practical cash-flow issue, not something the payment formula can predict.

Limits of the Calculator

The calculation is for a single loan with equal monthly payments and a fixed APR. It does not model variable rates, irregular payments, payment holidays, late charges, extra payments, or a payoff occurring between scheduled dates. A lender may use different rounding or day-count conventions, and loan disclosures may include costs not represented by the APR input. Enter the offered APR and amount as provided in the lender’s documents; do not treat the default values as a quote or approval estimate.

Frequently Asked Questions

Can one loan pay off multiple personal loans?
Yes, a new loan can be used to repay multiple balances if its proceeds and the payoff arrangements cover them. Confirm each payoff amount and verify that each old balance is cleared.

Will one loan lower my monthly payment?
It may, depending on the amount, APR, term, and fees. A longer repayment term can reduce the scheduled monthly payment while increasing total interest, so compare both figures.

Does consolidating personal loans save interest?
Not necessarily. The result depends on the new APR, term, fees, and how much remains on the existing loans. Compare the full remaining cost of each option using the actual loan documents.

Should I include fees in the loan amount?
If fees will be added to the balance, include them in the amount borrowed. If they are paid separately or deducted from proceeds, account for them separately when comparing total costs and funds available.

What if the calculator’s payment differs from a lender’s quote?
Check the amount financed, APR, term, payment dates, fees, and rounding. The calculator uses a simplified fixed-rate monthly-payment formula; the lender’s disclosure reflects the contract’s specific figures.

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

Related

• Loan APR Calculator: Estimate Your Monthly Payment
• Loan APR Comparison: Compare Payments and Interest
• Loan Appreciation Calculator: Meaning and Payment Formula

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