Debt Consolidation Calculator

Managing multiple debts can be overwhelming. This calculator helps you see if consolidating your debts into one loan would lower your monthly payment and total interest.

The reality is that when your credit cards are maxed out, your credit score drops. With poor credit, banks won't give you new loans. This is when debt consolidation companies step in - but they charge fees (1-8% of debt amount plus monthly fees) and don't actually get you better interest rates. You're still paying the same high rates, just through a middleman.

If debt consolidation doesn't work for your situation, you may have other options. For example, if you're in a high debt situation and receive structured settlement payments, selling those future payments for a lump sum could help you pay off high-interest debt without consolidation company fees.

The consolidation process begins by taking out a new loan large enough to pay off all your existing debts. Once approved, the lender typically pays your creditors directly, leaving you with a single monthly payment to one lender instead of multiple payments to various creditors.

The key to successful consolidation is securing an interest rate lower than your current weighted average APR. Your weighted average considers each debt's balance and interest rate, giving you a true picture of your current borrowing costs. Our calculator automatically calculates this for you.

After consolidation, you'll make one monthly payment to your new lender. This payment is often lower than your combined previous payments, especially if you secured a better interest rate. The simplified structure helps you stay organized and avoid missed payments.

The primary advantage of consolidation is financial simplification. Managing one payment instead of multiple due dates reduces the risk of missed payments and late fees. This organizational benefit alone can save hundreds of dollars annually in penalty fees. Consolidation also provides a clear finish line to being debt-free, which can be motivating if you don't have a structured payoff plan.

Interest savings represent the most significant financial benefit when consolidation works correctly. Consolidating $25,000 in credit card debt at 22% APR into a personal loan at 12% APR can save over $15,000 in interest over five years. If you qualify for a balance transfer card with 0% APR for 18 months, you could eliminate interest costs entirely during that period. The calculator shows your exact potential savings based on your specific debts.

However, consolidation has significant drawbacks. When your credit cards are maxed out, your credit score drops significantly - often 50-100 points or more. With poor credit (below 630), banks and lenders won't give you new loans at better rates. Balance transfer cards require good to excellent credit (mid-600s or higher), making them inaccessible to most people struggling with debt. This is exactly when debt consolidation companies target you.

Debt consolidation companies charge fees ranging from 1% to 10% of your total debt amount, plus monthly service fees. They don't give you a new loan - they charge fees to negotiate with creditors or set up payment plans. You're still paying the same high interest rates, just through a middleman who takes a cut. These fees can completely offset any potential savings.

If consolidation doesn't work for your situation and you're facing high debt, selling your structured settlement payments for a lump sum is one option that could help you pay off debt without these consolidation company fees.

Personal loans from banks, credit unions, or online lenders are the most common consolidation method, offering fixed rates between 6% and 36% based on your credit score. These loans provide predictable monthly payments and clear payoff timelines, typically ranging from $1,000 to $100,000 with 2-7 year terms. However, many come with origination fees of 1% to 10% of the loan amount, which are added to your total cost and included in the APR.

Balance transfer credit cards can offer 0% APR promotional periods lasting 12-21 months, but only if you have good to excellent credit (typically mid-600s or higher). The catch is balance transfer fees of 3% to 5% of the amount transferred. If you don't pay off the balance before the promotional period ends, you'll face the card's regular APR, which could be higher than your original debt. You also can't transfer balances between cards from the same issuer.

Home equity loans or HELOCs allow homeowners to borrow against home equity at rates of 6-10%, but your home becomes collateral. If you default, you risk losing your home. These options also involve closing costs and appraisal fees. Debt consolidation companies are different - they don't give you a loan. Instead, they charge fees (typically 1-8% of debt plus monthly fees) to manage your payments, but you're still paying the same high interest rates through a middleman.

To get the most accurate results, gather your most recent statements for all debts you want to consolidate, including credit cards, personal loans, medical bills, and other unsecured debts. Having complete information ensures the calculator provides precise comparisons between your current situation and potential consolidation scenarios.

The calculator requires three key pieces of information for each debt: the current balance, the annual percentage rate (APR), and the minimum monthly payment. It accepts up to 10 separate debts and performs advanced amortization calculations to show total interest paid, monthly payment differences, and payoff timelines for both scenarios.

When entering consolidation loan terms, use realistic estimates based on your credit profile if you haven't applied yet. Credit scores of 700+ typically qualify for 8-14% APR, scores of 650-699 for 14-20% APR, and scores of 620-649 for 20-28% APR. The calculator then shows you exactly how consolidation affects your financial picture.

Consolidation only works when you have good to excellent credit (670+) and can qualify for a new loan at a lower interest rate than your current weighted average. Use the calculator to determine your weighted APR first, then compare it to potential consolidation loan rates. Even a 2-3% reduction can save thousands of dollars over the loan term.

The harsh reality is that when your credit cards are maxed out and your credit score has dropped, banks and lenders won't give you new loans. Your credit score falls because high utilization hurts your score, and lenders see you as high risk. This is exactly when debt consolidation companies target you - but they charge fees (1-8% of loan amount plus monthly fees) and don't actually get you better rates.

If you can't qualify for a traditional consolidation loan and consolidation companies want to charge you fees, consider other options. If you're facing high debt and receive structured settlement payments, selling those future payments for a lump sum could help you pay off debt without consolidation company fees. The calculator helps you see if consolidation would actually save money - if it doesn't, explore alternatives.

If debt consolidation isn't the right fit, consider the debt avalanche method. This mathematically optimal strategy involves making minimum payments on all debts while directing extra money toward the debt with the highest interest rate. Once that debt is paid off, you roll its payment into the next-highest-rate debt, continuing until all debts are eliminated. This approach saves the most money on interest over time.

The debt snowball method offers a psychological alternative that prioritizes motivation over pure mathematics. Instead of targeting high-interest debt first, you focus on the smallest balance while making minimums on everything else. When you pay off that first debt, you roll its payment into the next-smallest balance, creating momentum as you see debts disappear one by one. This method can be more motivating for some people, even though it may cost more in interest.

Debt management plans through nonprofit credit counseling agencies provide another alternative. These plans negotiate lower interest rates with your creditors and consolidate your payments into one monthly payment to the agency. While you don't take out a new loan, the structure is similar to consolidation. However, you may need to close credit cards, which can impact your credit utilization.

If you're using credit cards to cover necessities, look for local assistance programs before considering more debt. If consolidation doesn't work and you receive structured settlement payments, selling those future payments for a lump sum could eliminate debt immediately without consolidation company fees.

When your credit cards are maxed out, your credit score drops significantly. High credit utilization (using most or all of your available credit) accounts for 30% of your FICO score. When utilization is above 80%, your score can drop 50-100 points or more, making it nearly impossible to qualify for new loans at better rates.

If you can qualify for a consolidation loan, paying off credit cards with it can improve your credit utilization and boost your score by 20-50 points. However, applying for a consolidation loan triggers a hard inquiry, which drops your score by 5-10 points temporarily. The reality is that most people with maxed-out credit cards can't qualify for consolidation loans from banks or credit unions.

When you can't get a traditional loan, debt consolidation companies step in. These companies don't improve your credit score - they charge fees to manage your payments, but you're still paying the same high interest rates. Your credit score stays low because the underlying debt and high utilization remain. If consolidation doesn't work and you're facing high debt, selling structured settlement payments for a lump sum could help you pay off debt and improve your credit utilization without consolidation company fees.

Begin by gathering all your current debt statements to understand your complete financial picture. List each debt with its balance, interest rate, minimum payment, and due date. This inventory helps you determine the total amount you need to consolidate and calculate your current weighted average APR. Use our calculator to see if consolidation would actually save money before you start the process.

Next, check your credit score honestly. If your score is below 630, banks and credit unions likely won't approve you for a consolidation loan at better rates. Balance transfer cards require mid-600s or higher credit scores. If you can't qualify, debt consolidation companies will offer their services, but remember they charge fees (1-10% of debt plus monthly fees) without actually getting you better rates.

Pre-qualification tools let you see potential rates without hard credit inquiries, but they'll show you the reality of your situation.

If you do qualify for a loan, review the terms carefully. Pay attention to the interest rate, loan term, monthly payment, and origination fees (typically 1-10% of loan amount). Calculate whether the fees and new rate actually save money compared to your current situation. If consolidation companies are your only option, understand that you'll pay fees without better rates.

If consolidation doesn't work, selling structured settlement payments for a lump sum could eliminate debt without consolidation company fees.

One major mistake is working with debt consolidation companies that charge fees without actually getting you better rates. These companies charge 1-8% of your debt amount plus monthly fees, but you're still paying the same high interest rates. They don't give you a new loan - they just manage your payments for a fee. Use our calculator first to see if consolidation would actually save money.

Another common error is consolidating when your credit is already damaged. When credit cards are maxed out, your credit score drops, and banks won't give you new loans. Debt consolidation companies target people in this situation, but they charge fees without improving your rates. If consolidation doesn't work, explore alternatives like selling structured settlement payments for a lump sum.

Failing to understand that consolidation only works with good credit is another mistake. If you can't qualify for a traditional loan at a lower rate, consolidation companies will charge you fees but won't improve your situation. Always calculate whether consolidation actually saves money - if fees and rates don't improve your situation, consider other options.

Debt consolidation differs from debt settlement, which involves negotiating with creditors to pay less than you owe. True consolidation pays your debts in full using a new loan, but this only works if you have good credit to qualify. Debt consolidation companies often charge fees without actually getting you better rates - you're still paying the same high interest, just through a middleman.

When your credit is bad and new loans aren't available, debt consolidation companies charge fees (typically 1-8% of debt amount plus monthly fees) to manage your payments, but you don't get better rates. Bankruptcy represents the most extreme option and severely damages your credit for 7-10 years. Our calculator helps you determine if consolidation would actually save money - if it doesn't, explore alternatives.

If you receive structured settlement payments and are facing high debt, selling those future payments for a lump sum is one option that could help you pay off debt without consolidation company fees. This approach eliminates debt immediately rather than managing it through a fee-charging company. Debt management plans through credit counseling agencies offer another alternative, but they also charge fees and may require closing credit cards.

Understanding your debt options is crucial for making informed financial decisions. Our calculator shows you if debt consolidation would actually lower your monthly payment and total interest - but remember, consolidation only works if you have good credit to qualify for better rates.

The reality is that when credit cards are maxed out and credit scores drop, banks won't give you new loans. Debt consolidation companies step in but charge fees (1-8% of debt plus monthly fees) without actually improving your rates.

If consolidation doesn't work for your situation and you're facing high debt, selling your structured settlement payments for a lump sum is one option that could help you pay off high-interest debt without consolidation company fees.

Every financial situation is unique. Use this calculator honestly to see if consolidation would save money - if fees and rates don't improve your situation, explore alternatives. Don't pay consolidation company fees if they're not actually helping you.

If you receive structured settlement payments, you have an option that debt consolidation companies can't offer: accessing money you already own. Unlike consolidation loans that add new debt, selling some of your future payments provides a lump sum without monthly payments, interest charges, or consolidation company fees.

With Smarter Payouts, you can see your instant offer range (minimum to maximum payout) in under 60 seconds — no phone call required, no personal information needed upfront. This privacy-first approach lets you explore your options without pressure before deciding if selling makes sense for your situation.

Important: All structured settlement transfers require court approval, which protects you by ensuring the transaction is fair and in your best interest. We encourage you to seek independent professional advice before making any decision. Selling may not be right for everyone, but for those facing high-interest debt, it can provide immediate relief without the fees and limitations of traditional consolidation.