Debt consolidation loan calculator
Example: three debts into one loan
Consolidation replaces several debts with one loan, ideally at a lower rate and with one payment. It saves money only if the new rate is lower or the term is not much longer, and if you do not run the old accounts up again.
Before consolidating
| Debt | Balance | APR | Monthly minimum |
|---|---|---|---|
| Credit card A | £5,000 | 24.9% | £150 |
| Credit card B | £3,000 | 29.9% | £90 |
| Loan | £4,000 | 14.9% | £120 |
| Total | £12,000 | £360 |
The comparison
Paying the three debts with the minimums, using the money from cleared debts to speed up the rest, takes 55 months and £7,767 of interest. Consolidating into one 4-year loan at 9.9% costs £2,465 of interest. That is a saving of £5,302 in this example, but a longer loan or a higher rate could erase it.
| Separate debts | Consolidation loan | |
|---|---|---|
| Monthly payment | £360 | £301.35 |
| Time to clear | 55 months | 48 months |
| Total interest | £7,767 | £2,465 |
Example only. Enter your own numbers in the calculators.
Risks to watch
- A secured consolidation loan puts your home or car at risk if you cannot pay.
- A longer term can raise the total interest even with a lower rate.
- Fees and early settlement charges on the old debts.
- Running up the cleared cards again, which leaves you with both debts.
- Check your credit file and use an eligibility checker before you apply.
Free help with debt
If you are struggling, free impartial help is available from StepChange, PayPlan, Citizens Advice and MoneyHelper. Be careful of firms that charge fees to arrange debt solutions.
Sources and further reading
Questions people ask
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Results are estimates for information only, not financial advice. Read the full disclaimer.