How this debt consolidation calculator works
It answers one question: does replacing your current debts with a single loan actually cost you less? To do that fairly, it prices up both options in full.
Every figure updates the moment you change an input — there's no button to press. Here's what the tool does behind the scenes:
- Prices your current debts. It projects clearing them with the debt snowball method — paying every minimum, then rolling each freed-up payment onto the next-smallest balance — and totals the interest and the months to clear. That's a realistic, disciplined baseline, not the far more expensive minimum-only trap.
- Prices the consolidation loan. Using the standard amortisation formula, it works out the fixed monthly payment for the loan amount, APR and term you enter, then totals the interest over the full term and adds any arrangement fee.
- Compares total cost, not monthly payment. The like-for-like number is total cost: the debt you clear plus every pound of interest and fees. The calculator shows both totals and the difference between them.
- Gives a plain verdict. If the loan is cheaper, it says how much you'd save. If it's more expensive, it says how much extra — and points you back to clearing the debts you already have.
Why a lower monthly payment can cost you more
Consolidation loans are usually sold on the monthly payment. That's the wrong number to judge them by.
Stretching your balance over a longer term always lowers the monthly payment, because you're spreading it across more months — but every extra month is another month of interest. A consolidation loan at a genuinely lower APR can still cost more in total than your current debts if it runs for years longer. This is the single most common way consolidation quietly costs people money, and it's exactly what the total-cost comparison above is built to expose. Judge a loan by what it costs you in the end, not by what it costs you each month.
When debt consolidation is worth it
Consolidation makes sense when the maths and your behaviour both line up.
It's worth considering when the loan's total cost genuinely undercuts your current debts, when a single payment makes your finances easier to manage, and — critically — when you're confident you won't run the cleared cards straight back up. That last point matters more than the interest rate: a consolidation loan that clears your cards only helps if the cards then stay clear. If your credit file is distressed, watch the APR closely, because the offers available to weaker profiles are often higher than the debts they'd replace. Run your real numbers above before deciding.
Consolidation vs the snowball method
Consolidation optimises your interest rate; the snowball optimises your motivation. They aren't mutually exclusive.
If this calculator shows the loan costs more, keeping your debts and clearing them smallest-first with the snowball calculator is cheaper and needs no credit check — or rank them by rate with the avalanche calculator to pay the least interest. Many people combine both: consolidate only the highest-rate balances into one lower-rate loan, then snowball whatever's left. For the full trade-off — cost, speed, risk and eligibility — read debt snowball vs debt consolidation, and if credit cards are the bulk of your debt, how to pay off credit card debt in the UK.
What the calculator assumes
Results are estimates. The current-debts projection applies interest monthly (APR ÷ 12), keeps each minimum payment, rolls freed-up payments onto the smallest remaining balance, and adds no new spending. The consolidation loan uses standard amortisation at a constant rate over the term you enter. The loan amount is pre-filled from your total balance for a like-for-like comparison; if your lender adds the fee to the loan rather than charging it upfront, add it to the loan amount so it accrues interest too. Typical UK personal-loan and card rates are published by the Bank of England. Always check the current terms of any offer before you apply.