David is a Chartered Financial Analyst and certified credit counselor with 15 years of experience helping individuals manage high-interest debt and improve their financial health.
This 4-in-1 Debt Consolidation calculator helps you see if a new loan can simplify your payments. Enter any three variables—Loan Amount, Annual Rate, Term, or Monthly Payment—and we will solve for the fourth.
Debt Consolidation Loan Calculator
Consolidation Loan Payment Formulas
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Solve for Loan Amount (P):
P = M [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]
Solve for Loan Term (T):
T = ln(M / (M – Pi)) / (n * ln(1 + i))
Solve for Rate (R):
Solved iteratively (no direct formula)
Formula Variables
- (P) Loan Amount: The total amount of debt you plan to consolidate into the new loan (e.g., total of all credit card balances).
- (R) Annual Rate: The new, fixed annual interest rate (APR) offered for the consolidation loan.
- (T) Loan Term: The total number of years to repay the new loan (e.g., 3, 5, or 7 years).
- (M) Monthly Payment: The single, fixed monthly payment for the new consolidation loan.
- (i) Monthly Rate: The annual rate divided by 12.
- (n) Total Payments: The total number of payments (Term in years * 12).
Related Calculators
- Personal Loan Calculator
- Debt to Income (DTI) Calculator
- Loan Payoff Calculator
- Simple Interest Calculator (for credit cards)
What is a Debt Consolidation Loan Calculator?
A Debt Consolidation Loan Calculator is a tool that helps you estimate the single monthly payment you would have if you took out a new loan (typically a personal loan) to pay off multiple existing debts. This is a common strategy for managing high-interest debts, such as credit cards, by combining them into one loan with one fixed monthly payment, a fixed interest rate, and a fixed end date.
The primary goals of debt consolidation are to simplify your finances (from many payments to one) and, ideally, to secure a lower average interest rate than what you are currently paying on your various debts. This can help you save money on interest and pay off your debt faster.
This 4-in-1 calculator allows you to model different scenarios. You can calculate your new payment, find out how much debt you can consolidate for a target payment, see how the term affects your payment, or determine the interest rate you’d need to make it work for your budget.
How to Calculate a Consolidation Payment (Example)
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Gather Your Loan Details
You have $20,000 in credit card debt. You are approved for a debt consolidation Loan Amount (P) of $20,000 at an Annual Rate (R) of 11.5% for a 5-year (T) term. You want to find your new single Monthly Payment (M).
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Convert Annual Rate to Monthly (i)
First, convert the annual rate to a monthly decimal: i = (11.5% / 100) / 12 = 0.115 / 12 = 0.0095833
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Calculate Total Number of Payments (n)
Next, find the total number of monthly payments: n = 5 Years * 12 Months/Year = 60 payments
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Apply the Amortization Formula
Use the standard loan payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M = 20,000 [ 0.0095833 * (1 + 0.0095833)^60 ] / [ (1 + 0.0095833)^60 – 1 ]
M = 20,000 [ 0.0095833 * (1.7742) ] / [ 1.7742 – 1 ]
M = 20,000 [ 0.017004 ] / [ 0.7742 ]
M = 20,000 * 0.02196
M = $439.20 -
Final Result
Your single, fixed monthly payment for the 5-year consolidation loan will be $439.20.
Frequently Asked Questions (FAQ)
It can, especially if you choose a longer loan term (T). However, a longer-term means you may pay more in total interest over the life of the loan. The main goal should be to secure a lower interest rate (R).
Does debt consolidation hurt your credit score?It can have a mixed, temporary impact. Applying for a new loan can cause a small, temporary dip in your score. However, paying off all your credit cards will drastically lower your “credit utilization,” which can significantly *boost* your credit score in the medium term.
Is this different from debt settlement?Yes, very different. Debt *consolidation* is paying the full amount you owe via a new loan. Debt *settlement* is negotiating with creditors to pay *less* than what you owe, which is a different process that can severely damage your credit.
What interest rate can I get?Rates are based almost entirely on your credit score. If you have excellent credit (720+), you may find rates under 10%. If you have fair or poor credit, the rates will be much higher, and consolidation may not save you money. You can use this calculator to find the “break-even” rate: enter your (P), (T), and target (M), and solve for (R).