Debt Consolidation Calculator

Should you consolidate your debt?

Debt consolidation rolls multiple debts into a single new loan, ideally at a lower interest rate. On paper, that means one payment, one rate, one timeline. But whether it actually saves you money depends on the math behind the offer you receive.

When consolidation makes sense

Consolidation tends to work when three conditions are true. First, the consolidation loan rate is meaningfully lower than the weighted average rate of your current debts. Second, you commit to a term that does not stretch your payoff timeline so far that the interest savings vanish. Third, you stop using the credit cards you just paid off.

If you have five cards at 22-26% APR and you qualify for a personal loan at 10%, the interest savings are real and significant. You also get the psychological benefit of a single predictable payment and a fixed payoff date, which removes the ambiguity that makes debt feel unmanageable.

When consolidation backfires

A lower rate does not automatically mean less total interest. If your consolidation loan stretches the payoff from 30 months to 60 months, you are paying interest for twice as long. Even at half the rate, the total cost can end up higher. This is the single most common trap in debt consolidation.

Origination fees are the second trap. Most personal consolidation loans charge between 1% and 8% of the loan amount upfront. On a $20,000 consolidation, that is $200 to $1,600 added to your balance before you make a single payment. This calculator does not factor in origination fees, so the real cost of consolidation is likely higher than what you see here.

The third trap is behavioral. Once your credit cards are paid off, they have available credit again. Studies show that a significant percentage of people who consolidate end up running balances back up on the same cards, leaving them worse off than before.

Consolidation vs. the avalanche method

Before consolidating, it is worth comparing what would happen if you attacked your debts aggressively with the money you already have. The avalanche method targets your highest-rate debt first while making minimums on everything else. With enough extra payments, avalanche can sometimes beat consolidation on total interest without requiring a new loan, a credit inquiry, or origination fees.

What this calculator does not tell you

This calculator provides a clean side-by-side comparison of current debts versus a consolidation loan, but it leaves out several important factors. It does not include origination fees or balance transfer fees. It does not account for variable rates that may increase over the loan term. It does not assess whether you qualify for the rate you entered. And it does not factor in the credit score impact of opening a new account and closing old ones.

For these reasons, the numbers here are a starting point, not a decision. Use them to understand the general direction, then consult with a financial advisor or Licensed Insolvency Trustee if your situation is complex.

What is the Burden Score?

Your credit score measures your value to lenders. The Burden Score measures your risk to yourself. It is a 0-100 score built on five proprietary stress signals that capture how much pressure your debt is actually putting on your life. A 780 credit score and a Critical Burden Score can exist on the same person.

This calculator can tell you whether consolidation makes financial sense. The Burden Score tells you how vulnerable you are right now. You can find yours free in the Unburden app in about 60 seconds.