Money Logo. Debt Consolidation Savings Calculator

This calculator will show you how debt consolidation could ease the total amount of money you’re spending on debt payments. In the spaces provided, choose the type of debt, and then fill in the following information for each debt: balance, monthly payment, interest rate, and annual fees. If you wish, provide an additional amount of cash you could furnish for debt payments.

Then enter the information pertaining to a possible consolidation plan. This includes the proposed interest rate, loan term, estimated closing costs, and combined federal and state tax rate.

Press CALCULATE, and you’ll see a detailed breakdown of how debt consolidation can change your monthly debt payments. If it seems that debt consolidation could get your head above water on a month-to-month basis, you may decide that consolidation is the best course of action.

Credit
Type
Balance Payment Interest
Rate
Annual
Fees
Additional Cash?

New Loan Information

Enter data about your planned New Loan (change any of the proposed numbers below).
Proposed interest rate (%):
Loan term:
Estimated closing costs ($):
Federal & state tax rate (%):


Results Current New Loan
Total debts:
Effective rate before taxes:
Effective rate after taxes:
Total monthly payment:
Monthly savings:
Annual savings:
Five year savings:
Ultimate Savings Report
What if you were to pay the same OLD payments instead of your NEW LOWER PAYMENTS... (which is your choice every month)... your monthly SAVINGS will reduce the loan principal each month, SHORTENING the loan itself... without ANY more costs than you used to pay.
Total years SAVED if same OLD payments are made on NEW loan:
Total years until "FREE & CLEAR" if savings are paid to principal:
TOTAL INTEREST SAVED over life of loan if savings are applied to principal:

Consolidation Can Help Balance Your Income & Expenses

Many Bills.

Owing massive amounts of money is something that most adults would rather avoid for a number of reasons. While there is a lot to be gained from certain types of loans, such as a mortgage on a primary residence, there are other balances that will only be a burden the longer you carry them.

On the other hand, a home loan gives you the opportunity to own a valuable asset that is likely to gain value over time, and you'll also enjoy reduced taxation thanks to the opportunity to deduct the interest payments on your mortgage. And of course, you'll improve your credit rating when you consistently make your mortgage payments.

Then there are other outstanding balances to consider. Standard loans (student, auto, etc.) aren't so bad, except for the fact that they put you in the red.

What you really need to watch out for, though, are high credit card balances. Thanks to high interest rates and compound interest, you can soon end up owing an incredible sum that is far greater than your initial expenditure.

If someone had told you that you'd end up paying $300 for that $100 pair of boots, you probably wouldn't have bought them on credit! But there is a way to get out of the pickle you're in and save money, even as you repay your creditors. When you consolidate your debt, you stand to save a lot.

Meet with a Credit Counselor

Before you make the decision to combine all of your credit accounts into one, it's probably a good idea to contact a credit counselor to make sure you do it right. And there are a couple of reasons to get help from a professional rather than going it alone.

More than likely, you're probably not a financial whiz, so it would be wise to speak with an experienced professional before you make a major financial decision that will have a huge impact on your future. A credit counselor can look at all of your current lines of credit and run the numbers to make sure that combining them into one massive loan is in your best interests and will actually save you money in the long run.

In addition, however, you may find that not all of your creditors fall in line. Some of them could charge penalties for early repayment, for example. Or you may end up with some loans that currently carry a lower interest rate than what you can secure on a new loan.

In order to get you the best deal possible, though, a credit counselor can help make such determinations so that you can pay what you owe expediently. And you’ll save as much money as possible along the way.

Move Balances

Once you've consulted with a credit counselor, you can determine how best to integrate your credit accounts. And one option is to move balances on your credit cards.

Ideally, you can put all of your credit card debt into some kind of short-term loan with a much lower interest rate, but if you are underwater where your finances are concerned and/or your credit is shot, this might not be an option.

But by simply shifting the balances on your existing credit cards, you can save a lot and reduce the amount of time it takes to pay off your creditors. The best way to do this is to figure out which cards have the highest interest rates. From there, move those balances to the lowest-interest accounts.

Then you can pay off any remaining balances on the high-interest cards more quickly, which will significantly reduce the amount of interest you’re obligated to pay. And you can close those credit accounts as you pay them off.

Refinance

Another option for combining your outstanding credit accounts into one bill with lower interest is to refinance your home and roll all of your outstanding balances into it. But you need to be careful going this route.

Because your monthly expenses will decrease, you will definitely see immediate benefits if you're able to refinance your home at a lower interest rate. And of course, rolling over your other loans and your credit card balances will net you a significantly lower interest rate in most cases.

But you need to carefully consider the term of the loan. For example, it rarely makes sense to roll a car loan into a home loan. Even if you nab a lower interest rate, the fact that you'll have to pay off your car over 20 or 30 years instead of five should give you pause.

Although you'll gain a lower interest rate, extending the life of any loan by several years is going to result in paying more over time. There's a lot to be said for creating a more manageable financial situation with lower monthly payments if you're strapped for cash, but you need to be smart if you really want to save in the long run.

Get a New Loan

If you can swing it, this could end up being the best possible course of action, mainly because you'll have control over the term of the loan. When you take out a personal loan to cover all of your credit accounts, you can pay them off and roll everything you owe into one bill.

This will help you escape the trap of compound interest that can bog you down with additional financial obligations. And with a lower interest rate and a manageable term for repayment, you stand to lower your monthly expenses and save money in the process.

No New Lines of Credit

If you work with a credit counselor, chances are good that any agreement you make will include a promise not to open any new lines of credit until you've paid off everything you owe (or you risk voiding the deal). Still, this could be well worth your while, especially when you consider how it can help you pare down your financial obligations.

Even if you don't go this route for debt consolidation, however, it's important that you take this experience as an important life lesson and use it to amend your spending habits for the better. Moving into the future, this means closing credit accounts as you pay them off, working to improve your credit score, starting a savings, and only keeping accounts that you can afford to maintain.