Compare the monthly payments and remaining interest on two or three existing debts with a fixed-rate consolidation loan. Enter each balance, annual rate, and current fixed monthly payment. The replacement loan amount is the sum of those balances; enter its interest rate, term, and separately paid upfront fee. The result shows the change in monthly payment, modeled financing cost, and payoff time. It assumes no new borrowing and keeps each existing payment fixed. A lower new payment alone does not establish that consolidation costs less.
Worked formula check
The inputs come from CFPB installment-loan sample inputs. This check uses regular monthly periods, excludes the sample's odd first period and other charges, and calculates the outputs with the formula below. It is not a lender offer.
| Input or result | Value |
|---|---|
| Source-based balance repeated twice | $5,000.00 + $5,000.00 |
| Calculated combined balance | $10,000.00 |
| Rate and term for both paths | 12%; 24 months |
| Calculated combined current payment | $470.73 |
| Calculated replacement payment, no fee | $470.73 |
| Calculated cost difference, no fee | $0.00 |
Record each debt's current payment plan
Enter the remaining interest-bearing balance for each debt. Use the rate that applies to that balance and a monthly payment that you expect to keep fixed. The tool calculates each debt separately until it is repaid. It does not reduce a payment as a balance falls and does not transfer a freed payment to another debt. For a credit card with a minimum that changes monthly, enter a deliberate fixed payment if you want to use this model. If a payment cannot cover the modeled interest, the calculator asks you to increase it before comparing a replacement loan.
Enter the replacement loan terms
The replacement balance is calculated from the sum of the included debts. This lets the comparison focus on paying off the balances you entered. Enter the new loan's annual contract interest rate and the number of monthly payments. The upfront fee is paid separately, so the model does not add it to the borrowed balance. If your offer finances a fee or withholds a fee from the proceeds, this setup may not supply enough cash to retire the existing debts. Check the amount that will actually be disbursed and the amounts required to close the old accounts before using a quoted offer.
Read payment change and cost change separately
Monthly payment reduction is the sum of the entered current payments minus the new loan payment. A negative value means the new monthly payment is higher. Cost saved compares the remaining interest on the existing fixed-payment plans with the new loan's interest plus upfront fee. A negative saving means the replacement costs more under these assumptions. Current payoff time is the latest final payment among the existing debts; new payoff time comes from the replacement term. The sum of old payments is the starting combined amount, not a claim that it continues after individual balances are cleared.
Keep the comparison tied to its assumptions
The CFPB cautions that a smaller consolidation payment can reflect repayment over a longer time and a larger overall cost. This tool makes those separate outputs visible. It does not account for promotional periods, later rate changes, balance-transfer rules, delinquency fees, or new spending. The current plans use equal monthly interest periods and the entered payments throughout. The new loan uses a fixed rate and equal installments. Review the schedules for individual debts with the payoff calculator if you need more detail. Treat this page as a check on a defined payment plan, then compare it with the actual loan and account terms.
How it works
r = annual interest rate (%) / 100 / 12
P is the interest-bearing balance, n is the number of monthly payments, r is the monthly rate, and A is the scheduled payment. At a zero interest rate, A = P / n. Each month, interest = opening balance * r; principal = payment - interest; closing balance = opening balance - principal.
This is the regular-payment form of the actuarial relationship in CFPB actuarial formulas, Appendix J. The schedule retains full precision internally and rounds amounts only for display. The model uses a fixed rate and equal monthly periods. It excludes daily accrual, irregular first periods, missed payments, and prepayment charges.
For current debts, the schedule uses each entered fixed payment. Old cost is the sum of their remaining interest. New cost is the replacement loan interest plus its separate upfront fee. Payment reduction is old starting monthly payments minus the new payment.
Frequently asked questions
Does a lower consolidation payment mean I save money?
Not necessarily. Compare remaining interest plus fees and the repayment period. The CFPB explains that a smaller payment can result from paying over a longer time.
How many existing debts can I compare?
Enter two debts, or select the checkbox to include a third. The replacement loan amount is the sum of all included balances.
Does the model use changing credit card minimums?
No. It holds each entered monthly payment fixed and assumes no new purchases. A changing minimum-payment rule needs a different model.
Are freed payments moved to another debt?
No. Each existing debt is calculated separately. When it is repaid, its payment ends rather than being assigned to another balance.
What does a negative saving mean?
A negative cost saving means the new loan has greater modeled interest-plus-fee cost. A negative payment reduction means the new monthly payment is higher.