What does debt consolidation really cost?
Check the payment and full cost separately. Use the same debts when you compare the current bills with a new loan.
Page summary
Count interest and fees on the new loan, then compare that cost with keeping the same debts. A smaller payment can last longer and cost more. Cash after fees must cover the debts you want to pay off, or old bills remain due.
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’s fixed interest rate is 12%. You repay it over 36 months. The lender takes a 5% fee first. The cash left must still pay the full $10,000 on both cards.
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
Check cash for the payoffs, the new payment and the full cost. One may improve while another gets worse. Decide whether that change meets your need before you take the loan.
Questions about cost
What costs belong in the comparison?
Count current interest, new interest, origination fees, and any cash paid upfront.
Why borrow more when a fee is taken out?
The cash left after fees must cover the debts you want paid.
Does the calculator use changing card minimums?
No. It holds the entered payments fixed so the assumption stays visible.
What if a payment does not cover the interest?
The debt will not fall with that payment. Check whether you can pay more or need another 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.