Debt Consolidation Calculator Compare balance transfers, personal loans, and DMPs — with interest savings, fees, and payo...
Debt Consolidation Calculator
Compare balance transfers, personal loans, and DMPs — with interest savings, fees, and payoff timelines.
Debt consolidation** = combining multiple debts into one payment — ideally at a lower interest rate.
Three Main Options**:
- Balance Transfer Card**: 0% intro APR (12–21 mos), 3–5% fee → Best for disciplined payers who can clear debt in promo period
- Personal Loan**: Fixed rate (10–25%), fixed term (2–7 yrs) → Best for larger debts, predictable payments
- Debt Management Plan (DMP)**: Nonprofit counselor negotiates lower rates/fees → Best for overwhelmed borrowers needing structure
✅ Pro Tip**: Consolidation only works if you **stop adding new debt** — freeze cards, use cash.
⚠️ Avoid these dangerous traps:
- Deferred Interest Cards** — “0% for 12 mos” → all interest back-charged if not paid in full
- Prepayment Penalties** — Some loans charge 1–2% for early payoff
- DMP Credit Freeze** — Most require no new credit for 3–5 years
- Loan Front-Loading** — High fees upfront → negative equity
✅ When to Avoid Consolidation**:
- Debt < $3K (just use avalanche/snowball)
- Unstable income (you’ll miss payments)
- APR reduction < 3% (not worth fees/credit hit)
| Option | $10K Debt | Time | Total Cost |
|---|---|---|---|
| Current (20.4%) | $300/mo | 57 mo | $15,400 |
| 0% BT (18 mos) | $556/mo | 19 mo | $10,300 |
| Loan @ 14% | $342/mo | 36 mo | $12,300 |
| DMP @ 9% | $269/mo | 48 mo | $13,500* |
*Includes $50 setup + $35/mo × 48 = $1,730 fees
📉 Breakeven Analysis**:
- 0% BT pays off at **month 16** (vs. current)
- Personal loan pays off at **month 28**
- DMP pays off at **month 32**
➡️ Current Debt
Baseline: “$10K @ 20.4%, $300/mo = 57 months, $5,400 interest”
➡️ Balance Transfer
Model 0% intro period, fee, and post-promo rate — see if you’ll clear it in time.
➡️ Personal Loan
Compare fixed-term offers — include origination fees in total cost.
➡️ Debt Management Plan
Factor in setup + monthly fees — DMPs reduce rates but add costs.
Note: Assumes no new debt, on-time payments. Minimum payment = 1% + $5 or $25.