Debt Consolidation Calculator
Important to know: In many cases, debt doesn’t simply disappear when someone passes away. Outstanding balances may become the responsibility of a surviving spouse or impact the estate, reducing what’s left for loved ones.
This calculator helps you understand your current debt strategy — but the bigger question is how to prevent debt from becoming a burden on your family. Contact us now to protect your family from inherited debt →
Current Debts
| Debt Name | Remaining Balance ($) | Monthly or Min. Payment ($) | Interest Rate (%) | |
|---|---|---|---|---|
Consolidation Loan
Current Debts Total
Consolidated Loan
Debt Consolidation
Debt consolidation is a form of debt restructuring that combines several loans into one, mainly for two reasons: to lower either the interest rate or the monthly payment amount. With a good consolidation loan, it is possible to lower both. Another possible reason people consolidate loans is simplicity; instead of dealing with multiple different loans, debts, and payments each month, a consolidated loan only requires one, relieving hassle and saving time.
Most loans will require the payment of upfront fees. As a result, the real cost (real APR) of loans is higher than the interest rates advertised by lenders. This calculator can determine the real APR of consolidated loans after adjusting for applicable fees, which is the more accurate and comparable indicator of the financial cost of a loan.
Home equity loans, home equity line of credits, and cash-out refinances are common sources of funds used for debt consolidation. These are secured loans that are tied to collateral, such as real estate properties, generally lower risk for lenders, which lowers interest rates. On the other hand, unsecured loans can also be used to consolidate debts, such as personal loans or balance-transfer credit cards.
Considerations
- Loan fees or points can reduce savings; always compare total costs, not just interest rates.
- Debt consolidation can affect credit scores temporarily; timely payments help recovery.
- Extending loan terms can increase total interest even if the rate is lower.
Fix the Real Problem First
While effective loan consolidation can lower financial burdens, it’s worth tackling the root causes first—spending habits, budgeting, or income strategy. Debt consolidation can help, but behavioral changes make results last.