This calculator will help you determine if consolidation is right to you. This calculator will help you determine the best way of consolidating your debts and calculate your savings by obtaining a consolidation loan. A credit score can be used to compare loan options.
Calculator for Debt Consolidation
How to use the calculator for debt consolidation
Step 1: Enter the balances, interest rates, and monthly payments you currently make for your unsecured debt, such as credit cards, personal loans, and payday loans.
Click “I’m finished” to view the results of the calculator based on your numbers:
- Total balance: This is the sum of all your outstanding debts.
- Combined interest rates: The average weighted interest rate for all debts entered into the calculator.
- Total monthly payment: This is the total amount that you pay each month for these debts.
- You are debt-free: This is the time period that you have until you are free from debt. It is based on your current balance, monthly payments, and other factors.
Second step: Select your credit score range and view your options for debt consolidation, including personal loans. The typical annual percentage rates offered by lenders will be displayed, along with alternative options for those with bad credit.
Direct payment to creditors is a way for lenders to send your loan proceeds directly towards your creditors. This simplifies the process of repaying your debts.
Drag the sliders to the right of the table to input the estimated rate and loan term (in years) you would like for your new loan.
Step 3: Compare your current debts with the debt consolidation loan.
Consolidating debt is a smart choice if your new total payment exceeds your current total payment. You also save interest fees.
What is debt consolidation?
Consolidating debts can reduce your interest rates and repayment terms. This will save you time and money. You may choose to consolidate your debt with a consolidation loan. However, depending on your situation, there are other options.
Ways to consolidate debt
- A Debt Consolidation loan: This loan is typically offered by an online lender, credit union or bank. It allows you to consolidate multiple debts and leaves you with one monthly payment.
- Balance Transfer Credit Card – This option transfers credit card debts to a balance transfer card. It charges no interest for a promotional period of typically 12 to 18 month.
- Home equity loan: You may be eligible for a loan based upon the equity in your house to pay off other debts. However, you risk losing your home if your payments are not made on time.
- You can borrow money from your retirement account to pay off debts if you have a retirement or savings plan sponsored by your employer. There are some downsides to this: You will need less money for retirement and you may have to pay penalties or taxes if the loan is not repaid.
- The debt management plan: This is a way to combine multiple debts into one monthly repayment at a lower interest than loans or credit cards. However, it typically comes with a start-up charge and a monthly fee. It can take up to three to five years to repay the debt.
Which lender is best for me?
Consolidationnow reviewed more than 30 lenders to help you find the best one. Here is a list that highlights lenders who offer debt consolidation loans.
There are other options for debt repayment
Compare the best personal loans rates: The rate of your debt consolidation loan is determined by your creditworthiness and financial information. Compare the best personal loans rates to find out what you can expect from your lender.
You can also use the DIY method: If your debt exceeds 15% of your annual income, the avalanche debt or debt snowball methods are available to you.
Ask for help: Non-profit credit counseling agencies can help you manage your debts and help you repay them in three to five year.
Tom Harold is a personal finance and insurance writer who has more than 10 years of experience in covering commercial and personal insurance options. He is also determined to beat her brother, who is a financial advisor with intimate knowledge of the field of personal finance. He devotes time researching the latest rates and rules.