Debt Consolidation

How It’s Calculated

Each existing debt is amortized individually and summed for total interest paid. This is compared against amortizing the same total principal at the consolidation loan’s single rate and term.

Example

Three cards totaling $15,000 at a blended 22% APR might cost $6,000 or more in interest over a slow payoff. Consolidating into a 12% personal loan over 3 years can cut that interest by more than half — but only if you stop re-using the paid-off cards.

Does debt consolidation hurt my credit score?

There’s often a small, temporary dip from the new hard inquiry and new account, but scores typically recover and can improve over time as credit utilization drops.

Is a balance transfer card better than a consolidation loan?

Balance transfer cards can offer 0% for 12 to 21 months but usually charge a 3% to 5% transfer fee and require payoff before the promo ends. Loans offer a fixed rate and term with no ballooning risk.

Will consolidation actually save me money?

Only if the new rate is meaningfully lower than the blended rate of your existing debts, and if the old accounts aren’t immediately re-charged.