Debt Consolidation Calculator

Published on Aug 16, 2015 01:26 am

People consider debt consolidation for many reasons, including replacing multiple, high-interest monthly payments with a single one at a lower rate. Consolidating debt into one fixed-rate loan might save you money, simplify payments and improve your debt-to-income ratio in the eyes of future lenders. Our Personal Debt Consolidation Calculator can help you decide whether a consolidated loan might be worth your while.

Debt Consolidation Calculator Definitions

  • Loan balance – The amount you still owe on a given loan.
  • Loan payment – The monthly amount you currently pay as part of your loan contract.
  • Credit card balance – Your outstanding balance via your credit card agreement.
  • Credit card rate – Annual interest rate paid on outstanding credit card balances, per your agreement.
  • Credit card payment – Your monthly bill based on your outstanding balance and annual interest rate. To compare this to a fixed-rate loan, extend your credit card balance over the same number of months as the loan.
  • Interest rate – The proposed interest rate for your new consolidation loan.
  • Upfront costs – Any fees the lender adds to the loan amount, including appraisal and loan-origination fees.
  • Points – Your lender may ask you to pay points in exchange for a lower interest rate. These points are actually pre-paid interest. Instead of paying the interest over the life of the loan, points are a way to pay that amount up front at the inception of the loan. Points typically equal 1% of the loan amount, and they’re rolled into your closing costs.1 Some points are tax-deductible.
  • Rate earned on saving – This is the comparative interest amount you could have earned by saving money instead, typically 2 to 5% in the short term.
  • Income tax rate – This compilation of your annual state and federal taxes helps determine what you could save in income tax if you were to consolidate debt via a home equity loan.
  • Loan type – Compare advantages before consolidation. Home equity loans typically offer lower, tax-deductible interest, along with higher fees. Personal loans usually have lower fees but higher interest rates.
  • 1 Consumer Financial Protection Bureau

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    This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
    Published by permission from, Inc., an Experian company. © 2015, Inc. All rights reserved.

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