Debt Consolidation Calculator
Debt Consolidation Calculator
Compare paying off your current debts separately versus consolidating them into a single loan.
If you're juggling several credit cards or loans at different interest rates, rolling them into a single debt consolidation loan can lower your monthly payment and total interest — but only if the new rate and term actually work in your favour. This calculator compares both paths side by side.
How This Calculator Works
The calculator estimates the total interest you'd pay continuing with your current debts at their existing average rate, versus paying off a single new consolidation loan at your specified new interest rate and term. Consolidation loans typically carry a lower rate than credit cards, but choosing too long a term can offset — or even exceed — those savings by stretching out the time you're paying interest.
Frequently Asked Questions
Does debt consolidation always save money?
Not automatically — it saves money when the new loan's interest rate is meaningfully lower than what you're currently paying and the term isn't stretched out so long that the extra months of interest cancel out the savings. Always compare both total-interest figures before deciding.
What's a typical interest rate for a debt consolidation loan in Canada?
Rates vary widely by lender, your credit score, and whether the loan is secured or unsecured — personal consolidation loans commonly range from around 7% to 15%+ APR, well below typical credit card rates of 19–24%, but it's worth getting a real quote rather than assuming a rate.
Will consolidating my debt hurt my credit score?
Applying for a new loan causes a small, temporary dip from the credit check, but consolidating can help your score over time by lowering your credit utilization on revolving accounts and by giving you one fixed, on-time payment to manage instead of several.
Should I close my credit cards after consolidating the balances?
Not necessarily — closing cards can reduce your available credit and shorten your average account age, both of which can lower your credit score. Many advisors recommend keeping the cards open (and unused) rather than closing them right after consolidating.