Debt consolidation
Consolidating $15-30k of credit card debt at 22% into a 12% personal loan soundslike a clear win. Often it is — but the brand-stable math isn't about monthly relief. It's about lifetime interest, after the origination fee. A 3% origination fee on a 12% stated APR pushes the effective rate to ~14.5%. If your stretched term outweighs the rate drop, you actually pay more lifetime interest — even though the monthly payment fell. This calculator surfaces all three numbers explicitly.
Last updated 2026-05-13
- Current monthly
- $400/mo
- Consolidation monthly
- $407/mo
- Δ Monthly
- +$7/mo
- Status quo
- 5 yr 4 mo
- Consolidated
- 4 yr
- Status quo
- $10,610
- Consolidated (incl. $450 fee)
- $4,529
MethodologyWhen consolidation works, when it doesn't, and the behavioral trap
When consolidation works, when it doesn't, and the behavioral trap
The honest framing the industry hides: most consolidation calculators show you the new monthly payment alongside your current minimums and proudly highlight the difference. But that comparison is unfair — your current minimums understate what you actually pay (when paying minimum only, the card minimum drops as balance drops, dragging payoff out). And the consolidation monthly hides the origination fee. This calculator compares apples to apples: your actual current monthly payment versus the consolidation monthly, both as fixed amounts, with full lifetime accounting.
Origination fee = effective APR markup.A "12% personal loan" with a 3% origination fee on a 48-month term has an effective APR closer to 14.5%. The longer the term, the smaller the markup (fee amortizes over more months). The shorter the term, the larger. Always compare effective APR to your current blended card APR, not stated APR.
The term-extension trap: a 12% loan over 84 months on $15k gives you a $267/mo payment — much lower than the $400/mo you might be paying now. But the 84-month timeline means more total interest than your current 4-year payoff at 22%. Surface this with the lifetime number, not the monthly number.
When consolidation is structurally a win:(1) you have negative amortization currently (payment can't cover interest), (2) your blended card APR is 20%+ and you qualify for a consolidation loan ≤ 12%, OR (3) you have rate-shock cards (29%+ store cards) that the consolidation removes from your portfolio.
When consolidation is a wash or worse:(1) effective APR ends up close to current blended APR, (2) origination fee + term extension produces a worse lifetime number, OR (3) you can't commit to closing or freezing the cards after consolidating.
0% balance-transfer cardsoften beat consolidation loans outright — if your credit qualifies and you can pay off the balance within the promo window (typically 15-21 months). Transfer fee is 3-5%. If you won't finish in the window, the regular APR after promo (often 25%+) can be worse than where you started. Run the math both ways before deciding.
The behavioral risk no calculator can model: after you consolidate, the credit cards still exist with cleared balances and full credit limits available. About 40% of consolidators re-charge within 12 months — ending up with personal loan debt AND new card debt. The math only works if you commit to: (a) freeze the cards (literally — in a block of ice in your freezer, or removed from your wallet entirely), or (b) close them (watch for credit-score impact on length of history and utilization — consult before closing your oldest card). At minimum, delete saved card numbers from browsers and apps.
What we deliberately don't model: credit-score impact (multiple inquiries + new account opening + reduced average age of accounts typically drops score 10-30 points short-term, recovers in 6-12 months); prepayment penalties (rare on personal loans but check fine print); cosigner / joint-applicant scenarios; HELOCs and home-equity consolidation (much lower rate but converts unsecured debt to secured against your house — significantly different risk profile).