Debt Consolidation Calculator: Compare and Save
Tell us how much you owe, and we’ll show you how much you could save and when you’ll be debt-free
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Is debt consolidation right for you?
Debt consolidation is the act of taking one larger personal loan to pay off several smaller debts, usually credit cards but also other personal loans and medical bills. By consolidating, the goal is to replace higher-interest debt with lower-interest debt to save money, reduce monthly payments and get out of debt sooner.
You might be a good candidate for debt consolidation if:
- You’re paying high interest on credit cards or other debt
- You’re juggling multiple payments
- You qualify for a lower rate than you’re paying today
What rate can you expect based on your credit score?
Debt consolidation loan rates vary since they’re based on factors that are personal to you, like how much money you need to borrow and your payment history. Still, seeing what other borrowers qualify for can help you decide whether debt consolidation is worth pursuing. If it doesn’t look like you’ll get a lower rate, you may want to wait and improve your credit score.
Below are the average annual percentage rates (APRs) LendingTree users are offered on our platform. Find your credit tier and estimate your rate. If you aren’t sure what your credit score is, check it for free with LendingTree Spring.
| Credit tier | Average APR |
|---|---|
| Excellent (800 and above) | 14.76% |
| Very good (740-799) | 17.01% |
| Good (670-739) | 22.75% |
| Fair (580-669) | 27.59% |
| Poor (under 580) | 30.02% |
Your loan term can have a big impact on your savings
Consolidating can help you get out of debt quicker. To do so, pick the shortest loan term possible, though that also means you’ll have a higher monthly payment.
In general, shorter loan terms come with higher monthly payments but less interest over time. Longer terms can lower your monthly payment, but you’ll typically pay more interest overall.
Try different loan terms in our debt consolidation calculator to see how they affect your monthly payment, interest costs and potential savings. Here’s an example using a $20,000 debt consolidation loan with a 15% APR:
| Loan term | Monthly payment | Total interest paid | Total repaid |
|---|---|---|---|
| 36 months (3 years) | $693 | $4,959 | $24,959 |
| 60 months (5 years) | $476 | $8,548 | $28,548 |
| 7 years (84 months) | $386 | $12,419 | $32,419 |
Key takeaway: Choosing a 7-year loan instead of a 3-year loan lowers the monthly payment by about $300, but adds more than $7,000 in interest costs.
A LendingTree study found that consolidating credit card debt with a personal loan could save borrowers $1,750 and help them become debt-free six months sooner
How much does debt consolidation cost?
Other than interest, the main cost associated with debt consolidation loans is origination fees. Not all lenders charge them. These fees are deducted from your loan before it is sent to you. If your loan has an origination fee, then you will receive less money than you requested.
For instance, if you get a $20,000 loan that has a 5% origination fee, you would actually get $19,000. That’s because 5% of $20,000 is $1,000.
See if you qualify for a no-fee loan. Most of the time, these types of loans require at least good credit.
Comparing debt consolidation options
A debt consolidation loan can be a powerful tool, but it’s not right for everyone.
| Option | How it works | Best if |
|---|---|---|
| Balance transfer credit card | Move existing credit card balances to a card with a temporary 0% APR offer. | You have good credit and can pay off your debt in a year or two. |
| Home equity loan | Use your house as collateral and get a low-interest loan to pay off credit cards. | You’re certain you can pay what you borrow. Otherwise, you will lose your home. |
| Debt management plan | Get a three to five-year repayment plan through a certified credit counselor. | You’re having trouble affording your debt, whether or not you consolidate. |
Frequently asked questions
Debt consolidation can affect your credit in different ways at different times. Most debt consolidation loans require a hard credit pull, which will probably cause your score to drop by a few points.
If you close your old credit cards after consolidating, that can shorten the length of your credit history and reduce the amount of available credit you have — two factors that contribute to your credit score.
But debt consolidation could significantly boost your score in the long run, provided that you make on-time payments. A LendingTree study found that using a loan to pay off at least $1,000 of credit card debt can boost your score by 29 points after just one month.
Closing your credit cards after consolidating is usually a bad idea. It can shorten the length of your credit history and it reduces the amount of credit you currently have. Both can harm your credit score.
However, if you’re having a hard time with overspending after consolidating, then closing your cards may be necessary. Consolidating only helps if you stop using your credit cards as much, if at all. Continuing to charge means you’ll have that bill to pay on top of your debt consolidation loan.
Debt consolidation is a financial strategy that involves taking out one personal loan and using it to pay off multiple debts, usually credit card debt. It doesn’t reduce how much you owe, but it can lower your monthly payment and help you save money if you qualify for a low rate.
Debt settlement can reduce how much you owe, but fees can be expensive and it usually hurts your credit score. Here, you or a debt settlement company will attempt to negotiate with your creditors by offering a smaller amount than what you actually owe. Debt settlement is usually reserved as a last resort.
Yes, it’s possible to qualify for a debt consolidation loan with bad credit. However, borrowers with lower credit scores often receive higher interest rates, so it’s important to compare offers and make sure consolidating will actually save you money.