Debt Consolidation Calculator

Debt consolidation combines multiple debts into a single loan, potentially at a lower interest rate. This can simplify payments and potentially save money.

Types of Debt Consolidation

• Personal Loan: Unsecured loan to pay off credit cards
• Balance Transfer: Move balances to lower-rate credit card
• Home Equity Loan: Use home equity for lower rates
• 401(k) Loan: Borrow from retirement account (risky)

When Consolidation Makes Sense

• You qualify for a lower interest rate
• You have multiple high-interest debts
• You want to simplify payments
• You have steady income and good credit
• You won't accumulate new debt

Potential Drawbacks

• May extend repayment period
• Could cost more in total interest
• Fees and closing costs
• Risk of accumulating new debt
• May require collateral (home equity)

Before Consolidating

• Shop around for best rates and terms
• Calculate total cost, not just monthly payment
• Read all terms and conditions carefully
• Consider impact on credit score
• Have a plan to avoid new debt