Debt Consolidation Calculator: Combine Your Debts and Compare the Cost

Use the debt consolidation calculator above

Add each debt you currently hold, its outstanding balance and the interest rate, then enter the rate and term of the consolidation loan you are considering. The calculator works out your combined monthly payment and the total interest you would pay both ways, so you can compare them side by side before you commit to anything.

What debt consolidation actually is

Debt consolidation means taking out one new loan to pay off several existing debts, leaving you with a single monthly payment instead of five or six. The idea is simple: if the new loan charges less interest than the cards and loans it replaces, you pay less overall, or you free up cash each month by spreading the balance over a longer term.

That second point is where people trip up. A lower monthly payment is not the same as a lower total cost. Stretching the same debt over more years can mean you pay more interest in the end, even at a lower rate. The job of this debt consolidation calculator is to separate those two things so you can see exactly what is happening.

Consolidation is not a tax matter and there is no government rate involved. Personal loan and credit card rates are set by lenders and depend on your credit profile, so the figures here are entirely yours to enter. Treat the rates you type in as the ones a lender has actually quoted you, not the headline "representative APR" in an advert, which only 51% of accepted applicants need to be offered.

How the calculator works

There are two halves to the maths. First it adds up where you are now. Then it models the single new loan and compares.

For your current debts, the calculator totals every balance and every monthly payment:

• Total debt now = sum of all balances
• Total monthly payment now = sum of all current monthly payments

For the consolidation loan, it uses the standard amortising-loan formula that every personal loan in the UK is built on. In plain words:

• Monthly payment = Loan amount × monthly rate ÷ (1 − (1 + monthly rate) to the power of −number of months)
• Monthly rate = annual interest rate ÷ 12
• Number of months = term in years × 12
• Total interest = (monthly payment × number of months) − amount borrowed

The calculator then puts the two totals next to each other: the interest you would pay if you carried on as you are, against the interest on the single consolidation loan. The gap between them is your saving, or your extra cost. It also shows the difference in monthly outgoings, because for many people the immediate question is simply whether next month's budget will breathe a little easier.

One thing the calculator cannot guess is whether you would keep overpaying. Credit cards have no fixed end date, so the "total interest" on a card depends entirely on how much you throw at it each month. The tool assumes your current monthly payments stay roughly as they are, which is the fairest like-for-like comparison. If you are only making minimum payments on a card, the real cost of doing nothing is far higher than any consolidation loan, and that is worth keeping in mind.

Debt consolidation calculator worked example

Take Priya, a teaching assistant in Leeds. She has three debts and feels like she is paying a fortune each month with the balances barely moving:

• Credit card: £4,200 at 24.9% APR, paying £180 a month
• Store card: £1,100 at 29.9% APR, paying £55 a month
• Personal loan left over from a car repair: £3,700 at 12.9% APR, paying £165 a month

Her total debt is £4,200 + £1,100 + £3,700 = £9,000, and she is paying £180 + £55 + £165 = £400 a month.

A lender offers Priya a £9,000 consolidation loan at 11.9% APR over 4 years (48 months). Working the formula:

• Monthly rate = 11.9% ÷ 12 = 0.9917% (0.009917)
• Monthly payment = £9,000 × 0.009917 ÷ (1 − 1.009917 to the power of −48)
• That comes to roughly £237 a month
• Total repaid = £237 × 48 = £11,376, so total interest is about £2,376

Priya's monthly outgoing drops from £400 to about £237, freeing up around £163 a month. Because her old debts were charged at much higher rates, even spreading the balance over four years works out cheaper than the path she was on, provided she does not run the cleared cards back up.

Now a second scenario shows the trap. Imagine the same £9,000 but offered at 11.9% over 7 years instead of four. The monthly payment falls to roughly £158, which looks wonderful next to £400. But the total interest jumps to about £4,272, nearly double the four-year version. Same loan, same rate, far more interest, purely because of the longer term. This is exactly the comparison the debt consolidation calculator is there to expose.

What affects the numbers you put in

The result is only as good as the figures you enter, so a few pointers:

• Use APR, not the monthly rate. Credit card statements usually show both. APR includes how interest compounds over a year and is the figure the calculator expects.
• Check for early repayment charges. Some existing loans charge up to one or two months' interest to settle early. If yours does, add that to the balance you are consolidating, because the new loan has to clear it.
• Watch the arrangement fee. A handful of consolidation loans add a fee to the balance. If a lender quotes a fee, include it in the amount you borrow so the comparison is honest.
• Be realistic about the rate you will get. The rate depends on your credit score and the amount. A soft-search eligibility check shows your likely rate without leaving a mark on your file.

When consolidation helps, and when it does not

Consolidation tends to work in your favour when the new loan's rate is clearly below the weighted average of what you are paying now, when you keep the term sensible, and when you genuinely close or stop using the cleared cards. Used that way, it can cut both your monthly cost and your total interest, and it removes the mental load of chasing several due dates.

It works against you when you stretch the term so far that the total interest balloons, when the new rate is barely lower than your existing debts, or when consolidating an unsecured debt into something secured against your home. A secured consolidation loan or a second charge mortgage can offer a low rate, but it puts your house on the line. Missing payments on an unpaid credit card damages your credit; missing them on a loan secured against your home risks repossession. That is a serious trade you should never make lightly.

There is also the behavioural risk. Consolidation clears your cards to a zero balance, which can feel like a fresh start. If you then start spending on those cards again, you end up with the consolidation loan and new card debt on top. The maths only works if the old credit stays unused.

Common mistakes people make

• Comparing monthly payment instead of total cost. A lower monthly figure can hide thousands more in interest over a longer term. Always look at the total interest line, not just the headline payment.
• Forgetting the cards do not close themselves. Consolidating without cancelling the spending facility is how people end up deeper in debt within a year.
• Assuming you will get the advertised rate. Representative APR only has to be offered to slightly more than half of successful applicants. Your actual rate may be higher, which changes the whole calculation.
• Securing unsecured debt without thinking it through. Turning credit card debt into a charge over your home lowers the rate but raises the stakes to your property.
• Ignoring free help. If you are consolidating because you cannot keep up, a commercial loan may not be the right answer at all. Free debt advice (covered below) can sometimes get interest frozen or set up an arrangement that costs you nothing.

Where to get free debt advice

If your debts feel unmanageable rather than just untidy, speak to a free, impartial service before taking on any new borrowing. The government-backed MoneyHelper guide to debt consolidation explains the options in detail and links to free debt charities. Organisations such as StepChange and Citizens Advice can review your whole situation at no cost, and they have no product to sell you. Paying a company to "manage" your debt when these services are free is one of the most expensive mistakes a worried borrower can make.

For tax-related debts to HMRC, such as a Self Assessment bill, consolidation is rarely the right move; HMRC offers Time to Pay arrangements that are usually cheaper than a personal loan.

What to do next

Run your real figures through the calculator above, then do an eligibility check with one or two lenders using a soft search so you know the rate you would actually be offered. Compare that against your current weighted cost, keep the term as short as you can comfortably afford, and only proceed if both the monthly payment and the total interest come out ahead. If they do not, you may be better off overpaying your most expensive card first.

These figures are estimates for guidance only and do not constitute personal financial or debt advice. Your actual loan terms depend on the lender's assessment of your circumstances.

Who should use this calculator

Consolidation replaces several debts with one loan, usually at a lower rate and a single monthly payment. This shows whether that actually saves money — and the honest answer is often no, because the saving comes from the rate while the cost comes from the term.

Moving expensive card debt onto a cheaper loan genuinely helps. But stretching a two-year repayment into a five-year one lowers the monthly figure while increasing the total paid, which is how consolidation is usually sold. Compare total repayable, not the monthly payment, and the picture changes.

What this calculator assumes

• Existing balances are combined into a single fixed-rate loan over the term entered.
• Comparison is against continuing to pay the existing debts as they stand.
• Each payment clears some capital, so the interest charged falls month by month.
• No further borrowing is added during the term.

Limitations — what it does not cover

• The term extension trap. A lower monthly payment across a longer period usually costs more overall, however much better it feels.
• Secured consolidation. Moving unsecured debt onto your home converts a debt that cannot take your house into one that can.
• Arrangement fees and early settlement charges on the debts being cleared.
• Behaviour. Consolidation only works if the cleared cards stay cleared — re-borrowing on them is the most common failure.
• 0% balance transfers, which are usually cheaper than a consolidation loan for card debt.
• Free debt advice from StepChange or Citizens Advice, which is the right first step where debt is unmanageable.

Related calculators

To dig into the individual debts behind your total, the credit card repayment calculator shows how long a single card will take to clear and what it costs in interest. Use the personal loan calculator to model the consolidation loan itself, or the broader loan calculator to test different rates and terms. Once you have a single payment, the budget calculator helps you see how the freed-up money fits the rest of your month.

Before consolidating, compare the true cost - our guide to personal loans and APR shows how.