What you owe now
Balance, APR, and the payment you currently make each month.
The consolidation loan
Does consolidating help?
Consolidation only saves money if the new APR beats the blended rate on what you already owe.
Current interest is estimated by amortising each balance at its own APR using the payment you enter. It assumes you add no new spending to those accounts, which is the assumption most consolidations fail on. True Link Finance charges no origination fee.
The one comparison that decides it
Consolidation does not reduce what you owe. It replaces several balances with one loan, one rate, one payment, and one end date. Whether that saves money depends on a single comparison: the new APR against the weighted average APR of the balances you clear.
Beat that blended rate and you save. Miss it and you have moved the debt and paid for the move. The calculator above runs both sides so you can see which it is before applying anywhere.
The second test, which most people fail
What happens to the cards afterwards
Consolidating $6,000 of card debt and then rebuilding a balance on the same cards leaves you with the loan and the cards. That is the most common way consolidation makes things worse, and no calculator can model it. If the spending has not stopped, fix that first.
Reading the result
- Blended APR is the weighted average rate across your balances, weighted by size rather than by count. One large balance at 29% outweighs two small ones at 15%.
- Interest if you carry on amortises each balance at its own rate using the payment you currently make. Enter minimum payments and the figure gets large quickly, which is the real cost of paying minimums.
- Interest if you consolidate is the total finance charge on the new loan over its full term.
- The difference is your saving or your extra cost. It is not free money either way; it is interest you avoid or interest you add.
Term length changes the answer
Stretching a consolidation over a longer term lowers the monthly payment and raises the total interest. It is legitimate if the shorter payment genuinely does not fit your budget, but be clear about the trade. A consolidation that saves $40 a month while costing $600 more overall has bought you cash flow, not savings, and you should know which one you are buying.
When something else beats consolidation
| Situation | Better option |
|---|---|
| Good credit and a balance you can clear in 12 to 21 months | A 0% balance transfer card, allowing for the 3% to 5% transfer fee |
| Total unsecured debt is large against your income | A nonprofit debt management plan through an NFCC member agency |
| You can sustain aggressive repayment | Paying the highest-rate balance first, which is mathematically optimal and free |
| You cannot currently cover the minimums | Credit counselling, not more borrowing |
More detail on all of these is on the debt consolidation loans page.
Questions about consolidating
How the blended rate works, why your current payment matters, and when to walk away.
How is the blended APR worked out?
It is a weighted average: each balance's APR is weighted by its size relative to the total. A $4,000 balance at 29% and a $1,000 balance at 15% blend to about 26.2%, not to 22%, because the larger balance dominates.
Why does the calculator ask for my current payment?
Because what a balance costs depends on how fast you pay it. The same $2,000 at 25% costs very different amounts if you pay $60 a month rather than $200. Entering minimum payments will show you the true cost of paying minimums.
Does consolidating reduce what I owe?
No. It reorganises the debt into one loan with one rate and one end date. You save only if the new rate is lower than your blended rate, and only if you stop adding to the accounts you cleared.
Should I choose a longer term to lower the payment?
Only if the shorter payment genuinely does not fit. A longer term always increases total interest. Change the term in the calculator and watch the interest figure move; that is the real price of the lower payment.
Will consolidating hurt my credit score?
Usually a small temporary dip from the hard inquiry and the new account, then improvement as utilisation falls on the cleared cards and on-time payments accumulate. The lasting effect depends on what you do afterwards.
What if the calculator says consolidating costs more?
Then do not do it, at least not on those terms. Try a shorter term, check whether a balance transfer card is open to you, or speak to a nonprofit counsellor through the NFCC. We would rather tell you the arithmetic does not work than write the loan anyway.