What does debt consolidation really cost?
Quick answer
The cost of a consolidation loan includes interest and fees. Compare that cost with keeping the same debts and payments. Also check the new monthly bill and payoff date. A lower payment does not prove you save money. A fee taken out can leave an old bill unpaid.
Which costs belong in the total?
Write down the payoff balance, rate, and payment for each old debt. For the new loan, get the interest rate, APR, fees, payment, and loan length. Use the same debts on both sides.
Compare the same debt in dollars
This made-up example starts with two card debts. One is $6,000 at 24% APR, with a $200 monthly payment. The other is $4,000 at 20% APR, with a $150 payment. You add no new charges. Each payment stays fixed until that debt is paid.
The new loan has a 12% fixed interest rate, 36 monthly payments, and a 5% fee taken out. It must send $10,000 after that fee to pay both cards in full.
Scroll across to see all columns.
| What to compare | Keep the cards | Use the new loan |
|---|---|---|
| Amount owed at the start | $10,000 | $10,526.32 |
| Fee taken from the loan | $0 | $526.32 |
| Cash for old-debt payoffs | No new loan | $10,000 |
| Monthly payment at the start | $350 | $349.62 |
| Months until all debt is paid | 47 | 36 |
| Total paid from now on | $14,588.97 | $12,586.48 |
| Interest and loan fees | $4,588.97 | $2,586.48 |
Here, the new loan saves $2,002.50 in full borrowing cost. Its payment is $349.62. Check that amount against the $350 due on the cards now. A lower rate alone does not tell you whether the new payment fits.
If the lender approved only $10,000 and took a 5% fee, just $9,500 would reach the cards. The old debt would not be fully paid. Confirm payoff amounts and cash after fees before you accept a loan.
Example only, not an offer. The model holds rates and payments fixed, with no new charges, late fees, or payment changes. It does not move a paid-off card’s payment to the other card. Totals use unrounded payments; the final payment can vary by cents. The new rate is an interest rate, not a disclosed APR. Read the method and limits.
Check payment and full cost separately
A longer loan may ease the monthly bill but raise the full cost. A fee paid separately needs cash now. A deducted fee needs a larger loan if you want the same cash for payoffs.
Use the terms you were offered
Choose a loan only after checking cash for payoffs, the new payment, and the full cost. If one improves while another gets worse, decide whether that tradeoff fits your need.
Questions about cost
What costs belong in the comparison?
Count current interest, new interest, origination fees, and any cash paid upfront.
Why gross up a deducted fee?
The loan must deliver enough net cash to pay the selected balances.
Does the calculator use changing card minimums?
No. It holds the entered payments fixed so the assumption stays visible.
What if a current payment does not reduce the balance?
That path does not amortize. Raise the payment or use another debt option.
Check the cash for each payoff
Work out the loan needed after fees and compare a no-fee loan with a lower-rate loan.
Test the offer before you move the debt
Enter your debts and the proposed loan terms. Read both the savings and the time change.
Sources and method
Sources checked August 28, 2026. See our editorial policy for how we check the work.
Read the sources and limits
- CFPB: Personal-loan fees. Origination and other charges that can change the consolidation result.
- CFPB: Consolidating credit-card debt. Loan, balance-transfer, fee, term, and recurring-debt risks.
- Rung debt-consolidation method. Fixed-payment comparison debt-consolidation@2026-08-28.1.
The cost tool compares fixed payments with no new charges. Your agreement sets the fees and payoff rules. The result does not predict a credit score or approval.