Debt Consolidation CalculatorA good way to save money on interest and potentially reduce your monthly debt payments is to consolidate your debt. Debt consolidation means combining several credit cards or other loans into a single loan with a lower interest rate. If you have a good credit rating and enough income to make payments on a consolidation loan for your debts, you can get a much lower interest rate than typical credit card interest rates. This allows you to pay the debt down faster since the interest rate is lower, and you may be able to reduce your overall monthly payments as well.
How does debt consolidation work and how much can you save? Find out by using the Debt Consolidation Calculator to analyze your debts.
Using the Debt Consolidation CalculatorEnter information about your debt payments and loans in the Current Debts and Loans section of the calculator. Enter the debt balance, interest rate, and monthly payment that you are currently making. You can enter up to 4 debts in the calculator. If you have less than 4 debts to enter, just enter 0 as the balance for the extra debt entries in the calculator.
Next, click "Compute" in the Step 1: Debt Analysis section. This will calculate the payoff time, total of your payments, and total interest for each debt account. The sum of all of your debt balances will be entered under Current Debt Summary, along with the total of your monthly debt payments and the total that you will pay under your current plan.
An example debt consolidation loan will also be entered under the Debt Consolidation Plan section of the calculator. The default amount of the debt consolidation loan is the total of the debts entered under Current Debts and Loans. The interest rate is 6%, and the monthly payment on the consolidation loan is the same as the total current payments on your debts.
You will be able to see how long it will take to pay off a consolidation loan and how much money on interest payments you will save. The blue box shows your total savings with a debt consolidation loan.
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