15.9% Rate, 3-Year Debt Consolidation
Consolidation projection for a $22,500 example balance. Use the calculator below to enter your own debts and loan offer.
Estimated Total Savings
$9,073
Example
Consolidating 3 debts totaling $22,500 into one 15.9% loan over 3 years (with a 3% fee) changes the monthly payment from $615 to $814 and saves about $9,073 in total interest and fees compared to paying off each debt at its current minimum.
Current Combined Min. Payment
$615
Consolidated Monthly Payment
$814.35
Loan Amount (incl. fee)
$23,196
Real APR (fee-adjusted)
18.08%
Loan amount vs. interest & fees
- Loan Amount: $22,500
- Interest + Fees: $6,817
What Is Debt Consolidation?
Debt consolidation replaces several separate debts — credit cards, personal loans, medical bills — with one new loan that pays off all of them at once, leaving you with a single monthly payment and a single interest rate. It's typically done through a personal loan, a balance transfer card, or a secured loan such as a home equity loan or cash-out refinance.
Consolidation only saves money when the new loan's real cost — interest plus any origination fee or points — is genuinely lower than what you'd otherwise pay across your existing debts. Stretching the term to get a smaller monthly payment can quietly increase total interest even at a lower rate, so this calculator compares the full cost of both paths, not just the monthly payment.
Consolidated loan balance over time
Year-by-Year Amortization Schedule
| Year | Paid This Year | Interest Paid | Remaining Balance |
|---|---|---|---|
| 1 | $9,772 | $3,225 | $16,648 |
| 2 | $9,772 | $2,104 | $8,980 |
| 3 | $9,772 | $792 | $0 |
How Is the Real APR Calculated?
The lender's quoted rate applies to the full loan amount, including any fee rolled into the balance — but you only actually receive the amount needed to pay off your debts. The real APR solves for the interest rate that equates your monthly payments to that smaller net amount, so it always runs higher than the quoted rate whenever a fee applies.
Secured vs. Unsecured Consolidation
Secured options — a home equity loan or cash-out refinance — usually carry the lowest rates because the loan is backed by collateral, but they put your home at risk if payments lapse. Unsecured options — personal loans and balance-transfer cards — carry higher rates and lower limits but no collateral risk.
Why a Lower Payment Isn't Always a Win
Extending the term from three years to seven can cut the monthly payment substantially while increasing total interest paid, since the balance sits outstanding — and accruing interest — for far longer. Always compare total interest and fees, not just the sticker-price monthly payment, before consolidating.
Fix the Real Problem First
Consolidation resets the clock on your debt but doesn't address the spending pattern that created it. Without a budget change, many people who consolidate end up re-accumulating balances on the credit cards they just paid off, ending up with both the new loan and the old debt. If a lower rate is your only goal, our Debt Payoff Calculator can show whether an aggressive avalanche or snowball plan gets you debt-free just as fast without taking on a new loan.
Example — Your Current Inputs
Consolidating 3 debts totaling $22,500 into one 15.9% loan over 3 years (with a 3% fee) changes the monthly payment from $615 to $814 and saves about $9,073 in total interest and fees compared to paying off each debt at its current minimum.
Additional Example — Small Balance, No Fee
$8,000 spread across two cards at a 22% average rate, paid at $260/month combined, costs about $2,050 in interest over roughly 3 years. Consolidating into a no-fee 10.9% personal loan over 3 years drops the payment to about $261/month and cuts total interest to roughly $1,400 — a clear win because there's no fee inflating the real APR above the quoted rate.
About These Parameters
- Balance, Rate & Minimum Payment (per debt)
- Enter up to four existing debts you're considering rolling into one loan. Leave a debt's balance at 0 to exclude it.
- Consolidation Rate & Term
- The APR and repayment period quoted by the lender offering the new loan. Longer terms lower the monthly payment but usually raise total interest paid.
- Loan Fee
- An origination fee or "points" charged as a percentage of the loan, typically deducted from the amount you receive. This calculator grosses up the loan so the net proceeds still cover your full existing balance.
Frequently Asked Questions
Will consolidating hurt my credit score?
A new loan usually triggers a hard inquiry and a temporary dip, but paying off revolving credit card balances often improves your credit utilization ratio within a few months, which can outweigh the initial dip.
Why is the real APR higher than the quoted rate?
Any upfront fee reduces the cash you actually receive while the interest still accrues on the full loan amount, so the effective cost of borrowing is always higher than the quoted rate whenever a fee is charged.
Is a balance transfer card better than a consolidation loan?
A 0% promotional balance transfer can beat any loan rate during its promo window, but only if the balance transfer fee is small and you can pay off the balance before the promotional rate expires and reverts to a high standard APR.