Debt Consolidation

Should you consolidate your debt? This calculator is designed to help determine if debt consolidation is right for you. Fill in your loan amounts, credit card balances and other outstanding debt. You can then see what your monthly payment would be with a consolidated loan. Try adjusting your terms, loan types or rate until you find a consolidation plan that fits your needs - and most importantly your budget!

Definitions

Loan amount owed

Loan amount owed is the total remaining balance on a loan. If you are uncertain of your exact balance, enter an estimate that is as close as possible.

Loan payment

The payment amount is your current monthly payment.

Loan months Left

The number of months you have left to make payments on a loan.

Credit card balance

The outstanding balance on your credit card. You do not need to include finance charges, they will be calculated based on your interest rate.

Credit card rate

Annual interest rate you pay on outstanding credit card balances. This calculator assumes simple interest is charged every month at 1/12th of your annual rate.

Credit card payment

Credit card payments are based on your outstanding balance and annual interest rate. For this loan comparison, the monthly payment is the amount required to pay off your credit card in the same number of months as your consolidation loan. Your actual credit card payment may be lower, but will often require many more payments.

Interest rate

Annual interest rate for your new consolidation loan.

Term in months

Number of months for your new consolidation loan.

Up front costs

Any fees you are required to pay up front to receive this loan. This could include appraisal fees, loan origination fees, etc.

Points

Number of points paid for this loan. Points are usually only paid for home equity loans.

Rate earned on savings

This is the rate you would have received if you had put your closing costs into savings. Enter your short term savings rate. For most people this is currently 2% to 5% annually. Savings accounts at a bank or credit union pay as little as 2% or less.

Income tax rate

This is your combined federal and state income tax rates. It is used to determine income tax savings when you use a home equity loan to consolidate your debt.

Loan type

The two most common loans types, home equity and personal, differ in fees, rates and tax deductibility of interest. Home equity loans often have higher fees, but usually have lower rates and a tax deduction for interest paid. Personal loans do not have a tax deduction for interest paid, and have a higher interest rate but often have lower fees. These are important considerations when choosing a loan.

Include closing costs in loan

If you include your closing costs in your loan, your loan balance, monthly payment and total interest paid will increase. You will, however, be required to pay less money up front. Including your closing costs in your loan may be a good option if you do not have funds available, or you can achieve a relatively high rate of return on your savings.