How to Use the Debt Consolidation Calculator

A Debt Consolidation Calculator helps you estimate your new monthly payment, total repayment amount, and total interest paid when combining multiple debts into one loan.

Debt consolidation can simplify your finances by combining multiple credit card balances, loans, or other debts into a single loan with one monthly payment. This calculator is designed to show you whether consolidating your debt is a smart financial move.

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Step-by-Step Guide:

Step 1: Enter Your Total Debt

Input the total amount of debt you want to consolidate. This includes:

• Credit cards
• Personal loans
• Auto loans
• Any other unsecured debts

Step 2: Enter the New Interest Rate

Add the APR (Annual Percentage Rate) for the new consolidated loan. This should ideally be lower than your current average.

Step 3: Enter the Repayment Term

Select how many years you plan to take to repay the consolidated loan (e.g., 3 years, 5 years).

Step 4: Click "Calculate."

The calculator will display:

• Estimated Monthly Payment
• Total Amount Repaid over the full term
• Total Interest paid during the loan

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Example Scenario

• Total Debt: $25,000
• New Interest Rate: 7%
• Term: 5 years

Result:

• Monthly Payment: $495.03
• Total Repaid: $29,701.80
• Total Interest: $4,701.80

This tells you exactly how much you’ll pay monthly and over time compared to your current debts.

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FAQ – Debt Consolidation Calculator

1. What is debt consolidation?
Debt consolidation means combining multiple debts into a single loan, ideally with a lower interest rate or more manageable monthly payment.

2. How accurate is this calculator?
This calculator gives a good estimate but doesn't account for loan fees, missed payments, or variable interest rates. Always confirm details with your lender.

3. What interest rate should I use?
Use the interest rate your bank or lender offers for a debt consolidation loan. If you’re unsure, shop around for rates first.

4. Does this calculator include fees?
No. You’ll need to add any loan origination fees or prepayment penalties separately.

5. Should I consolidate my debt?
If you can get a lower interest rate and maintain a solid repayment plan, consolidation can save you money and simplify your payments.