Short answer: Combining $5.500,00 into a single sample loan at 16,0% a 3 years would give a payment of $193,36 (today you pay $270.00) and a cost of $1.516,09 in interest and fees. Continuing with your current debts you would pay $2.122,80 in interest over 2 years and 7 months.
The preloaded values are an example: replace them with your own figures.
Debt 1With consolidation you would pay per month
With these figures, combining $5.500,00 into a single sample loan at 16,0% a 3 years would give a payment of $193,36 (today you pay $270.00) and a cost of $1.516,09 in interest and fees. Continuing with your current debts you would pay $2.122,80 in interest over 2 years and 7 months.
Your current debts
| Debt | Balance | Rate | Payment | Time | Interest |
|---|---|---|---|---|---|
| Debt 1 | $2.500,00 | 32,0% | $120,00 | 2 years and 7 months | $1.197,87 |
| Debt 2 | $1.800,00 | 28,0% | $90,00 | 2 years and 4 months | $653,01 |
| Debt 3 | $1.200,00 | 20,0% | $60,00 | 2 years and 1 month | $271,93 |
Results are for reference only and are not actual figures. Values depend on the country, the financial institution, taxes and current laws, and must be validated with an authorized financial institution. Banco.guru is an educational guide to what can be achieved; it does not offer products or personalized financial advice.
Tips for using this result
- A lower payment doesn’t always mean paying less: look at the total cost.
- After consolidating, don’t use the cards you paid off again.
- Include insurance and fees on the new loan.
- Compare with the avalanche strategy before taking out a new loan.
What is debt consolidation?
It means taking out a new loan to pay off several debts and keep a single payment. It can save you interest if the new rate is lower, but it can also cost more if the term is much longer or there are high fees.
How does this tool calculate?
- For each current debt it simulates how long it takes you to pay it off with the payment you enter and how much interest you pay.
- For the consolidation loan it calculates the fixed payment using the sum of the balances, the sample rate and term, plus the upfront fee.
- It compares the cost (interest + fees) of both paths.
It does not include insurance, taxes or prepayment charges on your current debts. Also read debt consolidation vs. refinancing.
Frequently asked questions
Is consolidating debt always worth it?
No. It makes sense when the new rate and the total cost are lower and you don’t run up debt again on the credit lines you free up.
Why does the payment go down but I pay more?
Because a longer term spreads the debt over more months and builds up more interest.
Does it affect my credit history?
Applying for a new loan means a credit check and a new debt. Paying on time helps; falling behind hurts.
Which debts are usually consolidated?
Often, card balances and consumer loans with high rates.
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