Debt consolidation

Would debt consolidation lower your cost?

Compare the same balances on both paths. A lower payment is useful only when the full cost and timeline also make sense.

Consolidation can save money and still keep you in debt longer.

By Rung Editorial · Updated September 9, 2026 · Sources checked August 28, 2026

  • The rate, term, fee, and payment all matter.
  • Using paid-off cards again can leave you with two layers of debt.

Compare current debts with a new loan

Add each credit card or unsecured loan you want to pay off. You can add more debts as needed. Blank entries are left out. The estimate holds each monthly payment fixed until that debt is paid off.

Current debts

Debt 1
For a card, use purchase APR. For a loan, use the interest rate, excluding fees already paid.

1 debt entry

Proposed consolidation loan

Your entries stay on this device and are not put in the URL.

Decision summary

Proposed total borrowing cost—
Cost change—
Payment change—
Payoff-time change—

    Current debts

    Monthly commitment—
    Total interest—
    Total paid—
    Payoff time—

    Proposed loan

    Required gross principal—
    Origination fee—
    Cash required upfront—
    Monthly payment—
    Total interest—
    Total paid—
    Payoff time—

    What a three-debt example shows

    This example uses three balances: $5,000 at 24% with a $175 monthly payment; $4,000 at 20% with a $140 payment; and $3,000 at 18% with a $110 payment. The new loan uses 12% interest, 48 months, and a 5% deducted fee.

    About $3,967

    Modeled interest plus fee on the proposed loan, compared with about $4,852 of interest on the current fixed-payment path.

    The proposed payment is about $333 instead of $425, but payoff takes 48 months instead of 43. The example saves modeled cost and adds 5 months.

    For a deducted 5% fee, required gross principal = $12,000 ÷ 0.95 = about $12,631.58.

    Use a two-part decision rule

    It may fit if

    • Modeled total cost falls.
    • The new payment fits every month.
    • You can stop adding card balances.

    Pause if

    • The fee erases the rate savings.
    • The term keeps you in debt longer than you accept.
    • Paid-off cards would fill again.

    A new loan moves the debt. You still owe it, and the payment must fit your budget.

    Method, limits, and sources

    Each current debt grows monthly at its entered annual rate divided by 12, then the fixed entered payment applies. The simulation stops at payoff or 600 months. A payment must reduce the opening balance. The proposed loan targets the same balances. A deducted fee is grossed up so net proceeds cover them. Debt-consolidation method and calculator platform: 2026-08-28.4.

    The model holds current payments and rates fixed. It assumes no new card charges, rate changes, late fees, or penalties. It does not predict a score or lender decision. It cannot model the risk that you rebuild card balances after consolidation.

    This tool is an educational fixed-payment model. It does not provide debt advice, predict a score, or send your balances anywhere.

    Choose a lower cost and a payment you can afford.

    If the loan does not meet both tests, ask creditors or a nonprofit credit counselor about a safer plan.

    Plan what comes after →

    Related help

    If consolidation hasn’t helped