Is a debt consolidation loan actually worth it? This calculator shows the full picture: the new monthly payment, total interest over the life of the loan, and — the number that actually answers the question — how much less interest you'd pay versus carrying the same balance at your current average rate.
Quick answer: Enter the balance you'd consolidate, your current average rate, and the new loan's rate and term. See the new payment, total interest, and potential savings.
Monthly payment = P × r × (1+r)^n / ((1+r)^n − 1) [standard amortizing formula] where P = balance consolidated, r = annual rate ÷ 12, n = term in months Total payback = monthly payment × n Total interest = total payback − balance consolidated Savings vs current debt = (current-APR total interest over same term) − (new-loan total interest)
Assumptions
New monthly payment ≈ $525. Total interest on the new loan ≈ $5,215. Carrying the same balance at the current 20.94% rate over the same term would cost ≈ $9,696 in interest — about $4,482 more than the consolidation loan.
New monthly payment ≈ $776. Total interest on the new loan ≈ $11,565. At the current 22.5% blended rate the same balance/term would cost ≈ $23,598 in interest — about $12,033 more than the consolidation loan.
It uses the standard amortizing-loan formula: Monthly payment = P × r × (1+r)^n / ((1+r)^n − 1), where P is the balance you're consolidating, r is the monthly interest rate (annual rate ÷ 12), and n is the term in months. A debt-consolidation loan is a fixed-rate, fixed-payment personal loan used to pay off multiple existing balances at once.
Debt consolidation loans are personal loans, so the Federal Reserve's G.19 Consumer Credit release average — 11.86% for a 24-month commercial-bank personal loan (data through May 2026) — is the standard reference point. Actual offers commonly range 7%–36% depending on credit score, income, and term; the lender decides your specific rate on file.
It depends entirely on the gap between your current average rate and the new loan's rate. The Fed G.19 release puts the average credit-card APR (all accounts) at 20.94% — well above the average personal-loan rate of 11.86%. Enter your own current average rate in this calculator (not the default) for an exact savings figure; the wider that gap, the bigger the savings.
Both are legitimate depending on your binding constraint. Shorter term = less total interest, more monthly burden. Longer term = more total interest, less monthly burden. The comparison table in this calculator shows the dollar trade-off directly for your own balance and rate.
There's typically a small, temporary dip from the hard inquiry and the new account, but consolidating can help over time by lowering your credit-utilization ratio (since revolving card balances move to an installment loan, which factors differently into utilization) and by simplifying on-time payments to one due date. Missing payments on the new loan would hurt more than the consolidation itself helps.
The rates in this tool are averages and defaults, not a quote. ClearValue Lending is a funding platform, not a lender — the lender that reviews your file sets your actual rate based on credit score, income, and existing debt, and it can land above or below the figures here. A pre-qualification check (typically a soft pull) narrows the range before you commit to a hard inquiry; run your own numbers through the calculator once you have a real offer to see the true savings.