Is consolidating worth it?
Consolidation swaps several debts for one loan, ideally at a lower rate. It helps only if the new total cost is lower. This tool puts both paths side by side.
How the comparison works
Your current path uses your balance, average APR and monthly payment to find the months to clear and the interest. The new loan uses the amortisation formula with its own rate and term. The difference in interest is your estimated saving.
Example
Take $18,000 of card debt at an average 22% APR paid at $450 a month. It would take about 73 months and cost roughly $14,740 in interest. A 48-month consolidation loan at 11% costs about $465 a month and about $4,330 in interest, saving roughly $10,400.
What to watch
Check origination fees, confirm the new APR, and avoid running the cards back up. A lower payment from a very long term can still cost more overall.
Alternatives
Balance transfers, debt management plans and paying the highest rate first can also work. Compare them before you decide.
Frequently asked questions
Will consolidation hurt my credit?
There may be a small dip from the application, but on-time payments can help over time.
Who qualifies for the best rates?
Borrowers with strong credit and stable income.
Is it ever a bad idea?
Yes, if fees are high, the term is far longer or you keep adding new debt.