Debt Consolidation Calculator

Debt consolidation means combining multiple debts into a single loan, ideally at a lower interest rate. It simplifies payments and can reduce total interest paid. Options include personal loans, balance transfer cards, HELOCs, and credit union loans. A 401(k) loan is sometimes considered but is generally not recommended due to the loss of tax-advantaged growth.

The best personal loan rates, generally under 10 percent APR, typically require a FICO score of 700 or above. Scores between 640 and 699 may qualify at 15 to 20 percent APR. Below 640, options are limited. Credit unions often have more flexible criteria than banks and are worth approaching first if your score is lower.

Consolidation can lower your interest rate immediately, while the avalanche method maximises savings mathematically without requiring new credit. Consolidation is better when you can secure a meaningfully lower rate and prefer a fixed payoff timeline. The avalanche method is free, requires no new credit applications, and avoids hard inquiries on your credit file.

Securing a personal loan triggers a hard credit inquiry. Consolidating into a home equity loan converts unsecured debt to secured debt, risking foreclosure if you cannot repay. Extending the repayment term can increase total interest even at a lower rate. Cleared credit cards may also tempt new spending and recreate the debt problem.

Federal student loans can be consolidated through the Direct Consolidation Loan program, which requires no credit check and sets the rate as a weighted average of existing loans. Private student loans can be refinanced with private lenders. However, consolidating federal loans into a private product means losing access to income-driven repayment plans and forgiveness programs, so this should be considered carefully.

Debt consolidation in the UK means combining multiple debts, such as credit cards, store cards, overdrafts, and personal loans, into a single loan at a lower rate. This simplifies payments and can reduce total interest paid. It is available through banks, building societies, and online lenders.

Options include an unsecured personal loan (no asset risk, 6 to 15 percent APR for good credit), a secured loan against property (lower rate but home at risk), a balance transfer credit card (0 percent introductory period), or a remortgage (lowest rate but longest term). Each option carries different risks and cost profiles.

Transferring balances to a 0 percent purchase card (deals of up to 30 months are available) means all payments reduce principal rather than interest. A transfer fee of 2 to 3 percent applies. The balance must be cleared before the 0 percent period ends, otherwise the rate reverts to 20 percent or more. This strategy works best for those with strong credit and discipline to pay down the balance.

Applying for a consolidation loan triggers a hard search visible on your credit file for 12 months. In the short term your score may dip slightly. Over time, consistent on-time payments and lower credit utilisation should improve your score. Avoid applying to multiple lenders simultaneously, as multiple hard searches in quick succession can signal financial stress to future lenders.

Free advice is available from StepChange Debt Charity (free debt management plans), Citizens Advice (free financial guidance), National Debtline, and MoneyHelper (government-backed). Avoid fee-charging debt management companies when free alternatives exist, as their fees reduce the money available to pay your creditors.

Debt consolidation in Australia means rolling multiple debts, such as credit cards, personal loans, and buy-now-pay-later balances, into a single lower-rate loan to reduce interest and simplify payments. It is available through banks, credit unions, and online lenders, and can also be achieved by refinancing into a home loan.

Personal loan rates for debt consolidation range from 6 to 15 percent for good-credit borrowers, compared to credit card rates of 18 to 22 percent or more. Credit unions such as People First and Teachers Mutual often offer competitive rates. Use the Moneysmart loan comparison tool to compare products before applying.

Yes, many Australians roll personal debts into their home loan to access the lower mortgage rate. This reduces monthly payments significantly, but it extends the debt over 20 to 30 years and can dramatically increase total interest paid over the life of the loan. Model both the consolidated and unconsolidated scenarios carefully before deciding.

A debt agreement is a legally binding arrangement under Part IX of the Bankruptcy Act, allowing you to repay a reduced amount to creditors over time. It impacts your credit file for five years and is listed on the National Personal Insolvency Index permanently. Consider this option only when other options have been exhausted. It is administered by registered debt agreement administrators.

Free help is available from the National Debt Helpline on 1800 007 007, which provides free financial counselling. AFCA handles complaints about lenders. Moneysmart.gov.au offers comparison tools and independent guidance. Avoid debt management companies that charge upfront fees, as these reduce the funds available to clear your debts.

Debt consolidation in Canada means combining multiple high-rate debts into a single lower-rate loan or line of credit, reducing monthly payments and total interest. Options include personal loans, home equity loans, HELOCs, and debt consolidation programs through non-profit credit counselling agencies.

Bank personal loans for debt consolidation range from 7 to 20 percent depending on your credit score. Credit unions typically offer 8 to 15 percent. Compared to credit card rates of 19.99 to 22.99 percent, even a moderate consolidation rate offers meaningful savings over time. Always compare the total cost of the loan, not just the monthly payment.

Yes. A HELOC at prime plus 0.5 percent is significantly cheaper than credit cards and can be used to consolidate unsecured debt. However, this converts unsecured debt into secured debt, meaning your home is at risk if you cannot make payments. OSFI limits HELOC borrowing to 65 percent of property value.

Debt management plans are offered by non-profit credit counselling agencies that are members of Credit Counselling Canada. They consolidate your payments into a single monthly amount, and creditors may agree to reduce or waive interest. The plan appears on your credit file but is less severe than a consumer proposal or bankruptcy.

A consumer proposal is a legally binding offer to pay creditors a portion of what you owe, administered by a Licensed Insolvency Trustee. It can reduce total debt by 50 to 80 percent and stays on your credit file for three years after completion. Debt consolidation maintains full repayment of the original amount but at better terms. A consumer proposal is more severe but appropriate when debt levels are unmanageable.