Question 1

How It Works

Accepted Answer

Add all your current debts with their balances, interest rates, and monthly payments. Then enter the terms of a potential consolidation loan to see a side-by-side comparison. The calculator reveals your total savings on interest, your new monthly payment, and whether consolidation makes financial sense for your situation.

Question 2

When does debt consolidation save money?

Accepted Answer

Consolidation saves money when the new loan's interest rate is lower than the weighted average of your existing debts. It works best when you have multiple high-interest debts (like credit cards at 20%+) and can qualify for a consolidation loan at a significantly lower rate.

Question 3

Does debt consolidation hurt my credit score?

Accepted Answer

Initially, the hard credit inquiry may cause a small, temporary dip. However, consolidation often improves your credit over time by reducing your credit utilization ratio and simplifying payments, which helps avoid late payments. The long-term effect is usually positive.

Question 4

What's the difference between debt consolidation and debt settlement?

Accepted Answer

Consolidation combines your debts into one loan that you repay in full, typically at a lower interest rate. Settlement negotiates with creditors to accept less than what you owe. Consolidation preserves your credit score; settlement can significantly lower it but may reduce your total amount owed.

Debt Consolidation Calculator

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Matthew Collins