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Debt Consolidation Calculator

Debt consolidation with the term effect separated from the rate effect. A lower monthly payment can come from a lower rate or from a longer term, and only the first saves money.

Also called: consolidate debt calculator, debt consolidation loan.

₹
%
₹
%
%
Interest saved
₹1,57,230

₹1,57,230 saved by consolidating at 14% against 32%. The new payment is ₹18,117 against 28,000 now. Payoff moves from 37 months to 48. The consolidated term is longer than your current payoff, so part of the lower payment is stretching rather than saving.

Consolidated payment
₹18,117
Change in monthly payment
-₹9,883
Origination fee
₹13,000
Months at current payments
37
Months consolidated
48
Interest without consolidating
₹3,76,868
Interest consolidated
₹2,06,638
On the term
The consolidated term is longer than your current payoff, so part of the lower payment is stretching rather than saving.
How this is calculated
Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Consolidation replaces several debts with one loan at a single rate. The genuine benefit is the rate reduction. The trap is that a lower monthly payment often comes mostly from stretching the term, which reduces the payment and increases the total interest. This shows both the payoff period and the total interest so the two effects are separable. The other risk is behavioural rather than arithmetic: consolidating credit card debt frees up the cards, and re-accumulating on them turns one debt into two.

a lower payment from a longer term is not the same as a lower cost
D
Debt
F
Fee

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

consolidating from 32 to 14 percent

Total debt to consolidate
₹6,50,000
Weighted average current rate
32%
Current total monthly payments
₹28,000
Consolidation loan rate
14%
Consolidation term
4
Origination fee
2%

Interest saved₹1,57,230

2% of 6,50,000

Open this example

no fee and the same rate saves only through the term

Total debt to consolidate
₹6,50,000
Weighted average current rate
14%
Current total monthly payments
₹28,000
Consolidation loan rate
14%
Consolidation term
4
Origination fee
0%

Interest saved-₹90,097

boundary

Open this example

Method and limits

What it assumes

  • Current debts repaid at the stated total payment until cleared.

What it deliberately does not model

  • A weighted average rate hides that the highest-rate debt should be attacked first.
  • Secured consolidation puts an asset at risk for what was unsecured debt.
  • Re-accumulating on the cleared cards is the most common way consolidation fails.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Is a lower monthly payment a saving?
Only if it comes from a lower rate. A longer term lowers the payment and raises the total interest, which is the opposite of a saving.
What is the main risk?
Re-accumulating on the cards you just cleared. That is behavioural rather than arithmetic, and it is how most consolidations end up worse than the starting position.