Debt consolidation savings calculator
This UK-focused calculator estimates how your current debts compare with replacing them using a single consolidation loan. It models your current position as one combined balance with an average APR and a fixed total monthly payment, then compares that with a fixed-rate instalment loan using the APR and term you enter. You’ll see estimated payoff time, total interest, and how the monthly payment changes. A lower APR does not always mean a lower total cost: fees and longer terms can outweigh the benefit, and eligibility can change the real rate offered. Use the results as an initial comparison, then check the assumptions, affordability, and the lender’s terms before taking any action.
Written by MyFinanceTools Editorial · Reviewed: 1 April 2026 · This tool is designed for estimation and educational purposes. Loan offers, fees and accepted APRs vary by lender and credit profile. A lower monthly payment does not automatically mean the option is better if the term stretches or fees absorb the saving.
- Your current debts are modelled as one balance at an average APR with a fixed monthly payment.
- APRs stay constant and interest compounds monthly (APR ÷ 12).
- The consolidation loan is a fixed-rate instalment loan with a fixed term and fixed payment.
- No missed payments, no new borrowing, and no early repayment charges.
Your inputs
Compare your current repayment against a consolidation loan using representative terms.
Results
Consolidation loan checkpoints
| Checkpoint | Payment | Interest | Balance |
|---|
- Current: —
- Consolidation: —
- Fee model: —
Read this result as a decision estimate
Debt consolidation can reduce interest and simplify repayments, but the overall cost depends on your rate, term length, fees, and whether you keep borrowing.
The “current” scenario treats your debts as a single balance at an average APR with a fixed monthly payment. That is a simplification: cards and overdrafts often have changing minimum payments, and different products can have different rates.
The consolidation scenario uses a fixed-rate instalment loan with a fixed term. The monthly payment is calculated from the APR and term. If you choose a longer term to lower the monthly payment, total interest can rise even when the APR is lower.
If your current monthly payment is not high enough to reduce the balance after interest, the calculator will tell you and won’t produce results.
Worked consolidation example
Example only. Results depend on your exact borrowing and lender terms.
Suppose you have £12,000 across cards and an overdraft at an average APR of 24.9%, and you pay £350 per month in total. You compare that with a consolidation loan at 12.9% over 4 years with a £250 fee added to the loan.
The consolidation loan is likely to reduce the payoff time certainty (fixed term) and may reduce interest, but the monthly payment may change. If the consolidation payment is lower, that can improve cashflow, but it may also extend the time you remain in debt compared with paying more now.
How the consolidation estimate is built
This tool compares your current unsecured debt cost with the cost of replacing it with a consolidation loan.
The calculator estimates what you would pay if you continue with the existing debt figures you entered, then compares that with a new loan using the loan amount, APR and term provided. It focuses on total repayable cost as well as the monthly payment.
That matters because consolidation can make the monthly payment look easier while still increasing total interest if the term is much longer.
Limitations
Consolidation can look cheaper on paper while still being a worse decision in practice.
This estimate does not assess eligibility, credit score impact or whether a lender would actually offer the APR entered. It also cannot model behaviour risk, such as clearing cards with a loan and then rebuilding those balances.
Where current debts have different rates or changing minimum payments, the real path can differ from the simplified comparison.
Checks before you switch structure
Treat consolidation as one option inside a wider debt strategy, not as an automatic upgrade.
Read Debt Consolidation vs Balance Transfer and How to Reduce Debt Interest in the UK before applying.
You may also want to compare with the Balance Transfer Savings Calculator and the Credit Card Payoff Calculator.
When consolidation is worth testing
Consolidation only helps if the new arrangement is simpler and cheaper in the real world, not just in theory.
This tool is best for someone combining several existing debts into one new loan and checking whether the lower rate or single payment actually reduces total cost. It is most valuable when you already know the balances, interest rates and realistic term you would be offered.
It is less useful if the real problem is ongoing overspending, missed payments, or uncertainty about whether all debts can be included. A lower monthly payment can look like progress while the debt quietly lasts much longer.
Where consolidation comparisons go wrong
The main risk is mistaking a lower payment for a cheaper outcome.
A classic mistake is choosing the new loan mainly because the monthly payment feels easier, without checking whether the term is much longer than the debts being replaced. That can reduce short-term pressure but increase the total amount repaid. Another mistake is ignoring settlement fees or assuming you will close and stop using the old credit cards afterwards.
Edge cases include promotional card balances that would have stayed cheap for a while anyway, secured borrowing used to replace unsecured debt, and mixed debts with very different end dates. In those cases, the clean one-loan comparison can hide important trade-offs.
Use the result to judge suitability
The result should tell you whether consolidation solves a cost problem, a cash-flow problem, or neither.
If consolidation cuts both the total interest and the repayment timeline, the next step is to check the deal terms carefully and decide how you will prevent the old debt from returning. If it lowers the monthly payment but raises total cost, it may still help cash flow, but you should treat that as a deliberate trade-off rather than a saving.
If the result is weak, compare alternatives before committing. A balance transfer may work better for card-heavy debt. A focused overpayment plan using the debt snowball or avalanche method may be cheaper if your current rates are not extreme. The right answer depends on whether you need breathing space, lower interest, or stronger repayment structure.
FAQs
Common questions about consolidation comparisons and how to interpret the numbers.
Does a lower APR always mean I’ll pay less overall?
No. A longer term can increase total interest even with a lower APR, and fees can offset the benefit. Compare both monthly payment and total interest.
Why does the calculator treat my debts as one balance?
It’s a simplification so you can compare scenarios quickly. If your debts have very different rates, consider using a weighted average APR or modelling them separately with a repayment strategy tool.
What if my current monthly payment changes each month?
This tool assumes a fixed total monthly payment. If you usually pay the minimum on a card, your payment may fall as the balance falls, which can increase payoff time compared with a fixed payment assumption.
How is the consolidation monthly payment calculated?
It uses a standard fixed-rate instalment formula based on your APR and term. The fee is modelled as added to the loan balance when provided.
Should I include overdrafts and BNPL?
You can include anything you intend to repay or replace, as long as you reflect it in the total balance and average APR. For short-term BNPL, consider whether interest is actually charged in your case.
Will the calculator tell me if my payment is too low?
Yes. If your monthly payment does not exceed the first month’s interest, the balance will not reduce and the tool will stop and prompt you to adjust your inputs.
Can I use this for secured loans?
You can compare the numbers, but secured borrowing carries different risks. Always check terms, fees, and implications before proceeding.
Does this include credit score effects?
No. This is a cost and timing comparison only. Your eligibility and offered APR depend on lender checks and affordability assessments.