What is debt consolidation?

Debt consolidation combines multiple debts into a single loan with one monthly payment, typically at a lower interest rate.

Is debt consolidation a good idea?

It can be beneficial if you get a lower interest rate and can stick to payments. However, it won't solve spending habits that caused the debt.

Will debt consolidation hurt my credit score?

Initially, there may be a small dip due to hard inquiry. However, making regular payments and reducing credit utilization can improve your score over time.

Debt Consolidation Calculator

See if consolidating your debts makes sense

Current Debts

Credit Card36% APR

Balance: $100,000.00Min: $5,000.00/mo

Personal Loan14% APR

Balance: $200,000.00Min: $8,000.00/mo

Car Loan10% APR

Balance: $300,000.00Min: $10,000.00/mo

Total Debt$600,000.00

Total Min Payment$23,000.00/mo

Consolidation Loan

New Interest Rate (%)$12%

$8%$20%

Loan Tenure (months)$48 months

$12 months$84 months

How Debt Consolidation Works

Debt consolidation replaces multiple debts with a single loan. The goal is to get a lower overall interest rate and simplify payments.

Benefits of Debt Consolidation

Lower Interest Rate: Especially if consolidating high-rate credit cards
Single Payment: Easier to manage one EMI
Fixed Payoff Date: Clear end date for debt-free status
Improved Credit: Better utilization ratio

Things to Consider

Total interest paid over the loan term
Monthly payment affordability
Processing fees and charges
Prepayment penalties on existing loans

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Financial Disclaimer

This calculator provides estimated values for informational purposes only. Actual results may vary based on specific terms and conditions. Please consult with a financial professional for personalized advice.

Frequently Asked Questions

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