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Debt Consolidation Calculator

Last updated: 3 August 2026Information correct for tax year: 2026/27

Enter the total balance, a weighted current APR, the proposed APR and one comparison term. The calculator estimates both monthly payments using the same balance and term, then shows the difference. Read the limitations before treating a lower payment as a saving.

By FinanceHub UK Editorial TeamSources checked 3 August 2026Calculations run in your browser

Quick answer

A consolidation loan is not automatically cheaper. This calculator compares the same balance and repayment term at two APRs. A positive monthly difference suggests the proposed rate lowers the modelled payment, but fees, a longer real term, early-settlement costs, secured-loan risk and additional borrowing can make the total cost higher.

Calculator

Enter your numbers

Enter total balance.
Enter current rate.
Enter proposed rate.
Enter term.

How to use this calculator

  1. Add the balances you intend to clear.
  2. Estimate a weighted current APR or run separate comparisons where debts differ greatly.
  3. Enter the proposed APR and use the same term for a fair rate comparison.
  4. Check the lender quote for fees, total amount repayable and whether security is required.
  5. Seek free debt advice before consolidating where repayments are already unaffordable.

Explanation

What it is

A like-for-like payment comparison for one balance and one term at two interest rates. It is a screening tool, not a recommendation to consolidate.

How it works

The model assumes fixed rates, monthly payments, no fees and no further borrowing. Both payments amortise to zero over the selected term.

When to use it

Use it before reviewing a quote to see whether the quoted APR appears capable of reducing the monthly payment on a genuinely like-for-like term.

Limitations

  • The model excludes arrangement, broker, transfer and early-settlement fees.
  • Your existing debts may have different remaining terms and repayment structures.
  • A secured consolidation loan can put an asset, often a home, at risk.
  • A lower monthly payment caused by extending the term can increase total interest.
  • Approval, offered APR and affordability depend on the lender and your circumstances.

Key terms

Weighted APR
An approximate rate that reflects the size and rate of each current balance.
Amortising payment
A regular payment designed to clear principal and interest by the end of a fixed term.
Total amount repayable
All scheduled repayments and compulsory credit charges over the agreement.
Secured debt
Borrowing backed by an asset that may be at risk if repayments are missed.

Formula

How we calculate this

Both scenarios use the standard amortising-loan payment formula with the same opening balance and term. The result subtracts the proposed monthly payment from the current-model monthly payment.

Monthly difference = Payment(balance, current APR, term) − Payment(balance, proposed APR, term)

Statutory or methodological reference:MoneyHelper — Debt consolidation loans.

Formula trace: Convert each APR to a monthly decimal rate, calculate an amortising payment over the selected number of months for the same principal, and subtract the proposed payment from the current-model payment.

Worked example

For £10,000 over five years, the model compares an estimated £276.19 monthly payment at 22% APR with about £212.47 at 10% APR. The difference is about £63.72 a month before fees. A lower payment is useful only when the term and risks are truly comparable. Read MoneyHelper’s debt consolidation guidance.

FAQ

Does a lower monthly payment mean consolidation is cheaper?

No. A longer term or fees can lower the payment while increasing the total amount repaid.

Does the calculator include fees?

No. Add arrangement, broker, transfer and early-settlement costs when evaluating a real quote.

Should I secure consolidation debt on my home?

That can put the home at risk. Obtain free debt advice and consider unsecured alternatives before converting unsecured debt into secured borrowing.

What if my debts have different remaining terms?

Run separate scenarios or compare each settlement amount and remaining schedule. One weighted rate is only an approximation.

Will I receive the APR entered?

Not necessarily. Lenders assess eligibility and affordability and may offer a different rate or decline the application.

Common mistakes

  • Comparing a new five-year loan with debts that would be cleared sooner.
  • Ignoring fees and early-settlement charges.
  • Continuing to spend on accounts cleared by the new loan.
  • Turning unsecured debt into secured debt without understanding asset risk.

Tips

  • Ask for the total amount repayable, not only the monthly payment.
  • Close or reduce cleared credit facilities where appropriate to prevent re-borrowing.
  • Check free debt-advice options before taking new credit when payments are being missed.
  • Use soft-search eligibility checks where available before a full application.

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Sources and editorial review

Editorial ownership

Author: FinanceHub UK Editorial Team. Read our editorial policy.

Editorial status: Source checked and selected for indexing. This is an editorial check, not personalised professional advice or regulatory approval.

Sources checked: 3 August 2026. Next scheduled review: 1 March 2027.