Debt Consolidation Calculator
Juggling several different debts — a credit card here, a store card there, a personal loan somewhere else — each with its own rate, payment date and minimum payment, is not just stressful to manage; it can also mean paying more in total interest than a single, well-chosen consolidation loan would cost. This calculator combines up to three existing debts and compares them against a single new loan, so you can see whether combining them genuinely saves money rather than just simplifying your life.
Debt Consolidation Calculator
Add up to 3 debts and compare the total cost against consolidating into a single personal loan.
One Payment Instead of Three
The most immediate, visible benefit of consolidation is simplicity: one monthly payment, one due date, one balance to track, instead of juggling several. This alone reduces the chance of an accidentally missed payment on one of several accounts, which matters because a missed payment can trigger late fees and damage your credit score regardless of how well the other debts are being managed. Simplicity has real value, but it is not the same question as whether consolidation actually costs less — this calculator focuses on the financial comparison specifically, since a simpler but more expensive plan is not automatically a better one.
For some people, the reduced mental load of managing one payment rather than several is genuinely worth something on its own, even before the numbers are compared — it is a legitimate factor in the decision, just not one this calculator can quantify, so it is worth weighing alongside the financial result rather than instead of it.
Why the Weighted Average Rate Is the Number That Matters
Comparing a new consolidation loan’s rate against your debts individually is not quite the right comparison — the fairer benchmark is the weighted average rate across everything you currently owe, which accounts for the fact that a large balance at a high rate matters more to your overall interest cost than a small balance at the same rate. This calculator works out that weighted figure automatically from your entered balances and rates. If the new loan’s rate sits meaningfully below that weighted average, consolidation is more likely to genuinely reduce your total interest; if it sits close to or above it, the saving may be smaller than expected, or may not materialise at all.
The Behaviour Risk Nobody Talks About
Consolidation only actually reduces debt if the credit cards and facilities being paid off are not then used again — the maths behind a lower combined payment assumes the old balances stay at zero, not that they quietly creep back up alongside a new consolidation loan repayment. This is consistently one of the most common ways consolidation fails to help in practice: someone clears their cards with a loan, then gradually re-uses the now-available credit, ending up with both the original consolidation loan and new card debt on top of it. Closing or reducing the limit on paid-off cards, rather than simply leaving them open, is a common and effective safeguard against this specific risk.
This is not a hypothetical risk — it is one of the most frequently cited reasons debt advisers see consolidation fail to actually improve someone’s situation over time, which is exactly why it is worth deciding in advance, before the loan is even taken out, what will happen to the credit facilities being cleared.
Combining Three Debts Into One
A £2,000 credit card at 24.9% APR, a £3,500 store card at 29.9% APR and a £4,500 personal loan at 9.9% APR add up to £10,000 of total debt at a weighted average rate somewhere in the high teens, once the larger, cheaper personal loan balance is properly weighted against the two smaller, more expensive cards. A consolidation loan offered at, say, 11% APR sits comfortably below that weighted average, making a genuine interest saving likely — whereas a consolidation offer at 18% or 19% would be much closer to the existing blended rate, and might save little once the numbers are run properly.
When Consolidation Doesn’t Actually Help
Stretching repayment over a considerably longer term than your existing debts have left can lower the monthly payment enough to look attractive, while still increasing the total interest paid overall — a lower monthly figure and a genuinely cheaper total cost are not the same outcome, and it is easy to focus on the more visible monthly number. If consolidation is not producing a clear saving in your specific numbers, it may be worth looking at a 0% balance transfer for card debt specifically, via our Balance Transfer Calculator, or at refinancing a single existing loan on its own through our Cut Your Loan Costs Calculator, rather than consolidating everything together.
Frequently Asked Questions
Does consolidation always improve my credit score?
Not automatically — applying for a new loan involves a credit check, and closing several accounts at once changes your credit history and utilisation profile. The longer-term effect depends heavily on how well the new, simplified repayment is managed afterward.
Can I consolidate more than three debts?
Yes, in principle — this calculator handles up to three for simplicity, but a consolidation loan itself can typically cover any number of existing debts, as long as the total falls within what a lender is willing to offer.
Is a secured consolidation loan different from an unsecured one?
Yes, significantly — a secured loan is typically tied to an asset such as your home, which can put that asset at risk if repayments are missed, whereas an unsecured loan carries no such direct security, generally making it the safer default option for most people consolidating unsecured debts.
What credit score do I need to qualify for a good consolidation rate?
Generally, the best consolidation rates are reserved for applicants with a strong credit history, similar to most other forms of unsecured lending — a weaker credit profile may still qualify for consolidation, but often at a rate closer to, or not meaningfully better than, the debts being consolidated.
Where can I get free advice if my debts feel unmanageable?
Free, independent debt advice is available from organisations such as MoneyHelper, StepChange and National Debtline, all of which provide confidential support without charging for it.
Should I close my credit cards after consolidating?
Closing them, or at least significantly reducing their limits, is one of the most effective ways to prevent the balances creeping back up. It can have a small, temporary effect on your credit utilisation ratio, but this is generally outweighed by the protection it offers against re-accumulating the same debt.
Important Information
This calculator provides an estimate for general information purposes only and does not constitute financial advice. It does not check loan eligibility, and actual rates and terms vary by lender and individual circumstances. For advice specific to your situation, consult a qualified financial adviser or a free debt advice service. See our Disclaimer for further information.