{
  "id": "debt-consolidation",
  "version": "1d26dc310a52",
  "status": "published",
  "name": "Debt Consolidation Calculator",
  "question": "Is a debt consolidation loan cheaper?",
  "summary": "Compares paying your debts as you do now with one debt consolidation loan: the monthly payment, the total interest and fees, the APR, and the money saved or lost.",
  "category": "finance",
  "subcategory": "loans",
  "url": "https://www.acalculator.org/finance/debt-consolidation-calculator",
  "markdown": "https://www.acalculator.org/finance/debt-consolidation-calculator.md",
  "kind": "schedule",
  "method": "Current: each debt pays its own payment monthly, interest = balance × APR ÷ 1200, until it is gone. Loan: L = owed ÷ (1 − fee), payment = L × r ÷ (1 − (1 + r)^−n); saving = current total paid − n × payment.",
  "assumptions": [
    "Your current debts keep their rates and monthly payments, with no new charges, and each is paid until it is gone; nothing rolls over.",
    "The origination fee is taken out of the new loan, so the loan is made larger to pay off every debt in full.",
    "The new loan has a fixed rate and equal monthly payments made at the end of each month.",
    "Values are not rounded to the cent between months; only the display is rounded."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "debts": {
        "title": "Your debts",
        "description": "One row per debt: a name, what you owe, the yearly interest rate (APR), and the monthly payment.",
        "type": "array",
        "items": {
          "type": "object",
          "properties": {
            "name": {
              "title": "Name",
              "description": "A name for the debt, to tell the debts apart.",
              "type": "string",
              "maxLength": 40
            },
            "bal": {
              "title": "Balance",
              "description": "What you owe on this debt today.",
              "type": "number",
              "x-unit": "USD",
              "exclusiveMinimum": 0,
              "maximum": 10000000
            },
            "apr": {
              "title": "APR",
              "description": "The yearly interest rate. The monthly rate is this ÷ 12.",
              "type": "number",
              "x-unit": "percent",
              "minimum": 0,
              "maximum": 100
            },
            "min": {
              "title": "Monthly payment",
              "description": "The monthly payment on this debt, from your statement. It stays the same every month.",
              "type": "number",
              "x-unit": "USD",
              "minimum": 0,
              "maximum": 10000000
            }
          }
        }
      },
      "rate": {
        "title": "Consolidation loan rate",
        "description": "The fixed yearly interest rate of the new loan. The monthly rate is this ÷ 12.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 40
      },
      "months": {
        "title": "Loan term (months)",
        "description": "The number of monthly payments on the new loan, for example 36, 48, or 60.",
        "type": "integer",
        "minimum": 1,
        "maximum": 120
      },
      "fee": {
        "title": "Origination fee",
        "description": "A fee taken out of the new loan, as a percent of it. The loan is made larger so the rest still pays off every debt.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 20
      },
      "start": {
        "title": "Start date",
        "description": "The day you consolidate. The first payment is one month later.",
        "type": "string",
        "format": "date"
      }
    }
  },
  "outputs": {
    "saving": {
      "label": "Money saved by consolidating",
      "description": "The total you would pay on your current debts minus the total you would pay on the loan; negative when the loan costs more.",
      "format": "money"
    },
    "payment": {
      "label": "Loan payment",
      "description": "The monthly payment on the consolidation loan.",
      "format": "money"
    },
    "currentPayment": {
      "label": "Current monthly payments",
      "description": "The monthly payments on your debts today, added up.",
      "format": "money"
    },
    "change": {
      "label": "Monthly payment change",
      "description": "Your current monthly payments minus the loan payment: positive when the loan payment is lower.",
      "format": "money"
    },
    "owed": {
      "label": "Debts paid off",
      "description": "The balances of your debts, added up.",
      "format": "money"
    },
    "amount": {
      "label": "Loan amount",
      "description": "The debts paid off plus the origination fee.",
      "format": "money"
    },
    "feeAmount": {
      "label": "Origination fee",
      "description": "The fee taken out of the loan.",
      "format": "money"
    },
    "apr": {
      "label": "Loan APR",
      "description": "The yearly rate at which the loan payments repay the debts paid off, so the fee counts as a cost.",
      "format": "percent"
    },
    "loanInterest": {
      "label": "Loan interest",
      "description": "All the interest on the consolidation loan.",
      "format": "money"
    },
    "loanPaid": {
      "label": "Total paid on the loan",
      "description": "All the loan payments added up.",
      "format": "money"
    },
    "currentInterest": {
      "label": "Interest on current debts",
      "description": "All the interest if you keep paying your debts as you do now.",
      "format": "money"
    },
    "currentPaid": {
      "label": "Total paid on current debts",
      "description": "All the payments on your current debts until the last one is gone.",
      "format": "money"
    },
    "currentMonths": {
      "label": "Months to pay off current debts",
      "description": "The months until your last current debt is paid off at its payment.",
      "format": "integer"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "debts": [
        {
          "name": "Card A",
          "balance": 8000,
          "rate": 24.99,
          "payment": 240
        },
        {
          "name": "Card B",
          "balance": 4500,
          "rate": 21.99,
          "payment": 135
        },
        {
          "name": "Personal loan",
          "balance": 5000,
          "rate": 17.5,
          "payment": 180
        }
      ],
      "rate": 11,
      "months": 48,
      "fee": 5,
      "start": "2026-09-30"
    },
    "outputs": {
      "saving": 4415.939465324496,
      "payment": 476.101732316236,
      "currentPayment": 555,
      "change": 78.898267683764,
      "owed": 17500,
      "amount": 18421.052631578947,
      "feeAmount": 921.0526315789466,
      "apr": 13.759152197753059,
      "loanInterest": 4431.830519600382,
      "loanPaid": 22852.88315117933,
      "currentInterest": 9768.82261650383,
      "currentPaid": 27268.822616503825,
      "currentMonths": 58
    },
    "text": "A 48-month consolidation loan at 11% costs $476.10 a month and $22,852.88 in all, against $27,268.82 for your current debts."
  },
  "examples": [
    {
      "given": {
        "debts": [
          {
            "name": "Card A",
            "balance": 8000,
            "rate": 24.99,
            "payment": 240
          },
          {
            "name": "Card B",
            "balance": 4500,
            "rate": 21.99,
            "payment": 135
          },
          {
            "name": "Personal loan",
            "balance": 5000,
            "rate": 17.5,
            "payment": 180
          }
        ],
        "rate": 11,
        "months": 48,
        "fee": 5
      },
      "expect": {
        "owed": 17500,
        "amount": 18421.052631578947,
        "payment": 476.1017323162318,
        "apr": 13.7591521977525,
        "loanPaid": 22852.883151179125,
        "currentMonths": 58,
        "currentPaid": 27268.822616503825,
        "saving": 4415.9394653247,
        "change": 78.89826768376821
      },
      "source": "rules in content.mdx; Python 3 in docs/progress/WP-49/python/consolidation.py; Consumer Financial Protection Bureau, What do I need to know about consolidating my credit card debt? https://www.consumerfinance.gov/ask-cfpb/what-do-i-need-to-know-about-consolidating-my-credit-card-debt-en-1861/"
    },
    {
      "given": {
        "debts": [
          {
            "name": "A",
            "balance": 1200,
            "rate": 0,
            "payment": 100
          },
          {
            "name": "B",
            "balance": 2400,
            "rate": 0,
            "payment": 100
          }
        ],
        "rate": 0,
        "months": 24,
        "fee": 0
      },
      "expect": {
        "payment": 150,
        "currentMonths": 24,
        "saving": 0,
        "change": 50,
        "apr": 0
      },
      "source": "hand calculation in content.mdx; Consumer Financial Protection Bureau, What do I need to know about consolidating my credit card debt? https://www.consumerfinance.gov/ask-cfpb/what-do-i-need-to-know-about-consolidating-my-credit-card-debt-en-1861/"
    },
    {
      "given": {
        "debts": [
          {
            "name": "Card",
            "balance": 10000,
            "rate": 18,
            "payment": 300
          }
        ],
        "rate": 16,
        "months": 60,
        "fee": 8
      },
      "expect": {
        "amount": 10869.565217391304,
        "payment": 264.32670778651124,
        "apr": 19.889920057968656,
        "currentPaid": 13967.208972285776,
        "saving": -1892.393494904898
      },
      "source": "rules in content.mdx; Python 3 in docs/progress/WP-49/python/consolidation.py; Consumer Financial Protection Bureau, What do I need to know about consolidating my credit card debt? https://www.consumerfinance.gov/ask-cfpb/what-do-i-need-to-know-about-consolidating-my-credit-card-debt-en-1861/"
    }
  ],
  "sources": [
    "Consumer Financial Protection Bureau, What do I need to know about consolidating my credit card debt? https://www.consumerfinance.gov/ask-cfpb/what-do-i-need-to-know-about-consolidating-my-credit-card-debt-en-1861/",
    "Federal Trade Commission, Consumer Advice: How to get out of debt (debt consolidation loans). https://consumer.ftc.gov/articles/how-get-out-debt",
    "Regulation Z, 12 CFR 1026 appendix J, Annual percentage rate computations for closed-end credit transactions (actuarial method). https://www.consumerfinance.gov/rules-policy/regulations/1026/j/"
  ],
  "related": [
    "debt-payoff",
    "debt-snowball",
    "personal-loan",
    "credit-card-payoff"
  ],
  "changelog": []
}