Does debt consolidation hurt your credit score?

Initially, yes — applying for a new loan triggers a hard inquiry and temporarily dips your score 5–10 points. But over 6–12 months, having fewer accounts with balances and consistent on-time payments typically improves your score significantly.

What's the difference between debt consolidation and debt settlement?

Consolidation combines debts into a new loan that you pay in full — no negative credit impact beyond the inquiry. Settlement negotiates to pay less than you owe, which severely damages your credit and may create taxable income.

Is it worth consolidating if I only have 1–2 debts?

It depends on the interest rate difference. If you can get a loan at significantly lower APR than your current debt, yes. The fewer the debts, the less the benefit of simplicity, so the rate savings need to carry the decision alone.

Should I include my car loan or mortgage in consolidation?

Generally no. Secured debts (car, mortgage) have lower rates and specific protections. Rolling them into unsecured debt usually worsens your rate. Focus consolidation on high-rate unsecured debt like credit cards and personal loans.

What fees should I watch out for with consolidation loans?

Origination fees (1–8% of loan amount), prepayment penalties, and balance transfer fees (3–5%). Always add these to your total cost calculation. This calculator accounts for origination fees in the break-even analysis.

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Debt Consolidation Calculator: Is It Actually Worth It?

Is consolidating your debt worth it?

What This Does

Debt consolidation sounds like a lifeline — one payment, one interest rate, and a clear finish line. But whether it actually saves you money depends entirely on the numbers, and most people never run them before signing on the dotted line. This calculator helps you make that decision with clarity. Enter your existing debts — credit cards, personal loans, medical bills — along with the terms of the consolidation loan you're considering. In seconds, you'll see a side-by-side comparison of your total interest paid, monthly payment, and payoff timeline under both scenarios. The math is often surprising. A lower monthly payment can feel like a win while secretly costing you thousands more in interest if the repayment term stretches out. Conversely, consolidating high-rate credit card debt into a lower fixed-rate loan can shave years off your payoff and save real money. This tool is for anyone juggling multiple debts and wondering if rolling them together makes financial sense. Whether you're considering a personal loan, a balance transfer, or a home equity product, the logic is the same: compare total cost, not just monthly payment. The decision to consolidate isn't just financial — it also requires discipline. Consolidating credit card debt only helps if you don't run the cards back up. But before the behavioral question comes the numerical one, and that's exactly what this calculator answers.

When Should You Use This?

→You're paying 3+ debts with different due dates and rates and want simplicity
→You've been offered a personal loan rate lower than your average credit card APR
→You want to see if extending your payoff term is worth the lower monthly payment
→You're comparing a balance transfer offer vs. a consolidation loan
→You want to know your true break-even point before committing to consolidation

Example Scenario

Maria has three credit cards with balances of $4,200 (24% APR), $2,800 (19% APR), and $1,500 (22% APR). Her combined minimum payments are $312/month and she's paying $180/month in interest alone. A credit union offered her a $8,500 personal loan at 11.5% APR for 48 months, with a $221/month payment. Running the numbers: her current path costs $3,840 in total interest over 4 years if she pays minimums. The consolidation loan costs $1,108 in total interest — a savings of $2,732. Maria consolidates.

💳Debt Consolidation Calculator

Debt Consolidation Analyzer

Enter your current debts and a consolidation loan offer to see interest savings, payoff comparison, term scenarios, and a side-by-side breakdown. Results update live.