How this calculator works
This calculator lets you enter up to three existing debts — such as credit cards, store cards or an existing loan — each with its own balance, APR and current minimum monthly payment, then compares your combined current monthly outlay against a single new consolidated loan at a rate and term you specify. The difference between the two gives you an estimated monthly and annual saving.
The theory: why consolidation can genuinely lower your costs
Credit cards and store cards often carry considerably higher APRs than a fixed-rate personal loan, particularly for revolving credit used over an extended period rather than cleared in full each month. By replacing several higher-rate debts with a single loan at a lower blended rate, the theory is straightforward: less of your monthly payment goes toward interest, and more goes toward actually reducing what you owe, provided the new rate is genuinely lower than your current blended average.
Why "minimum payment" comparisons can be misleading
What "blended rate" really means
When you have multiple debts at different interest rates, your overall cost of borrowing is effectively a weighted average — a "blended rate" — across all of them, weighted by how much you owe on each. A consolidation loan is only genuinely beneficial if its new rate is lower than this blended rate; simply having a lower rate than your single highest-rate debt isn't enough if your other debts already carry lower rates than the new loan being offered.
The critical risk this calculator can't show you
This calculator shows the mathematical monthly saving from consolidating — but the single biggest real-world risk to actually realising that saving is continuing to spend on credit cards or accounts you've just cleared through consolidation. This creates "double debt": the new consolidation loan repayment, plus fresh spending on the cards you thought you'd cleared. See our full guide on using a debt consolidation loan the smart way for a step-by-step plan to avoid this common trap.
Why term length still matters here
Just as with any loan, extending your consolidation loan's term reduces the monthly payment but can increase the total interest paid over the full term, even at a lower rate than your original debts. It's worth checking the total amount repayable over the new loan's full term (using our Loan Repayment Estimator with your consolidated figures) alongside the monthly saving shown here, to get the complete picture rather than focusing on monthly cash flow alone.
When the numbers don't show a saving
If this calculator shows little or no saving — or even a higher new monthly payment — it may indicate that your existing debts' blended rate is already lower than the consolidation offer available to you, or that your credit profile means you're not being offered the most competitive consolidation rates. In this case, it's worth exploring alternatives such as a 0% balance transfer card for card-specific debt, or speaking to a free debt charity if the underlying issue is genuine affordability difficulty rather than simply wanting to simplify manageable payments.
The bottom line
Debt consolidation can produce genuine, meaningful monthly and long-term savings when the new rate is truly lower than your current blended rate — but the maths only tells half the story. Pair this calculator's output with a firm, honest commitment not to rebuild debt on newly cleared accounts, and always check the total cost over the full new term, not just the monthly figure.