Compare two schedules for the same cash need
Enter your own terms or explore the illustrative defaults. These scenarios are not available offers.
Model: principal = cash needed ÷ (1 − deducted fee percentage). The fee is withheld from principal; fixed monthly payments repay that principal with interest. Enter the annual interest rate, not APR. Equal monthly periods, no extra charges, no early repayment. Actual lenders may restrict principal amounts or round differently.
Worked example and calculation
At 0% interest and no fee, $1,000 over 12 months is about $83.33 per month and $1,000 in total. A 5% deducted fee requires about $1,052.63 principal to leave $1,000 cash. For interest-bearing payments: P × r ÷ [1 − (1 + r)^−n], where r is the annual percentage rate of interest ÷ 1,200 and n is monthly payments. Totals use unrounded modeled payments.
Combining debts can simplify the payment calendar. It does not automatically reduce the amount owed or the total borrowing cost. A lower monthly payment may result from a longer repayment period. 1
Before considering a consolidation loan, collect current payoff information and compare it with the new loan’s net proceeds, fees and full schedule. Keep a separate plan for avoiding new balances on the accounts being repaid.
Build a payoff comparison · Estimate the new payment
Start with payoff amounts, not a remembered balance
Record each creditor, the current payoff or balance information needed to settle the account, interest rate, ordinary payment and relevant payoff date. A statement balance can differ from the amount required when the payment actually arrives.
| Illustrative debt | Amount to repay |
|---|---|
| Card A | $2,000 |
| Card B | $1,500 |
| Existing personal loan | $1,000 |
| Total | $4,500 |
These fictional balances form a worksheet, not a household recommendation. Obtain actual creditor information before acting.
Will the new cash repay all the intended debt?
A hypothetical $4,500 new loan with a 5% fee deducted provides $4,275. That leaves $225 of the $4,500 payoff target uncovered. One new payment has not replaced all the old payments if a balance remains.
To net $4,500 after that fee, the mathematical principal is approximately $4,736.84. A provider may not offer that increment, and borrowing more changes the schedule. Compare the full decision rather than treating the gross-up as an instruction to increase debt. 2
Compare four results—not only the new payment
Coverage: do net proceeds meet the actual payoff amounts?
Monthly cash flow: what changes in the sum and timing of payments?
Debt-free date: does the new schedule end earlier or later?
Total cost: how do fees and all scheduled payments compare with a realistic repayment plan for the existing debt?
Without the current balances and a realistic repayment plan for your existing debts, you cannot tell whether consolidation saves money. Collect those figures before treating the comparison as complete.
A lower payment can still increase total cost
CFPB cautions that consolidation offers can involve fees, promotional rates or a longer period that raises overall cost. Compare what happens after any introductory period and how the full schedule works. 1
When comparing two scenarios, keep assumptions visible: balances, rates, fees, monthly payments and whether new borrowing continues. A chart showing “savings” while assuming no further card spending on one side and continued spending on the other is not an equal comparison.
Direct creditor payment needs explicit confirmation
Some products may pay creditors directly; others may send proceeds to you. Do not assume either arrangement is included. Find out which debts can be paid, how account information is verified, how long the transfer takes and what happens to any remainder.
Continue following existing payment obligations until the creditors confirm the relevant payoff. An application or lender transfer notification is not proof that every old account has a zero balance. Verify each destination and retain confirmation.
Consolidation is not debt settlement
A consolidation loan replaces debt with a new borrowing agreement. Debt-settlement services involve a different process and risks; they are not the same product merely because both mention reducing payments. Read the actual business role and service before authorizing it. 1 3
A balance-transfer card is another distinct arrangement with its own fee, promotional period and post-promotion terms. This page does not claim that a consolidation loan is always preferable.
Make the new budget durable
If the original balances grew because regular expenses exceeded income, replacing them alone does not fix that pattern. Review recurring costs and the amount available for repayment. Consider talking with a reputable nonprofit credit counselor or the creditors about options. Availability, fees and suitability still need checking. 1 3
The personal-loan planning ceiling is $35,000. It is not a guarantee that a consolidation amount, rate or repayment term is available through this site.
Debt-consolidation questions
Will one payment save money? Not necessarily. Compare the fee, full term, actual payoff coverage and baseline for the old debt.
Can a loan consolidate credit cards? Only where the provider permits that purpose and the net proceeds and payment process cover the intended accounts.
Should I stop paying the old accounts after applying? An application does not repay them. Confirm the creditor’s receipt and balance before treating an account as paid off.
Does direct pay happen automatically? Not without the actual product’s terms and verified payment instructions.
What if the fee creates a shortfall? Record the remainder and compare how it will be handled. Do not claim all debt is consolidated while an old balance remains.
Review personal loans · Understand net proceeds · Use the calculator
Further checks for this decision
Consider negotiating with creditors or a reputable credit counselor, and review fees and risks before paying for debt-relief services.4