Is Debt Consolidation Worth It? Calculator
Enter your current debt details and the consolidation loan offer to see if combining your debt saves money. We'll compare total interest paid, monthly payments, and give you a Worth It Score from 0–100.
Frequently Asked Questions
When is debt consolidation worth it?
Debt consolidation is worth it when your new loan rate is significantly lower than your current average rate (ideally 5%+ lower), the origination fee is under 3%, and you can commit to not running up new debt on the cards you pay off.
What credit score do I need for a good debt consolidation rate?
To qualify for the best debt consolidation rates (under 10% APR), you generally need a credit score of 720 or higher. Scores between 660–720 can still qualify but may see rates of 12–18%. Below 660, the rate offered may not be much better than your existing debt.
Does debt consolidation hurt your credit score?
Initially, yes — a hard inquiry and new account will temporarily lower your score by 5–10 points. However, over 6–12 months, paying down debt and reducing your credit utilization typically results in a net positive for your score.
What are the risks of debt consolidation?
The biggest risk is paying off credit cards with the loan and then running them back up, leaving you in a worse position. Debt consolidation solves the interest rate problem, not the spending behavior problem. It also extends your repayment timeline in many cases.
Is a personal loan or balance transfer better for consolidation?
A balance transfer is better if you can pay off the full balance during the 0% promo period (usually 15–21 months). A personal loan is better for larger balances or longer repayment timelines because it has a fixed rate, fixed term, and no promo-period risk.
The math that determines whether consolidation actually saves money
Debt consolidation works when your new loan rate is meaningfully lower than your current weighted average rate. If you have $8,000 at 24.99% and $6,000 at 19.99%, your weighted average is about 22.8%. A consolidation loan at 14% APR saves roughly $1,900 in interest over 3 years. That is a clear win. But if you can only qualify for 19% due to your credit score, the savings drop to under $400 over the same period — and that assumes the origination fee is zero. Always calculate the total cost including fees before deciding. A 2% origination fee on a $14,000 loan is $280 off the top, which erases months of interest savings.
Why credit score matters more here than almost anywhere else
Debt consolidation is one of the most credit-score-sensitive loan products available. The difference between a 680 score and a 740 score on a $15,000 consolidation loan can easily be 6–10 percentage points of APR. That is $2,000–$4,000 in extra interest over the loan term. If your score is below 680, it is worth pausing to evaluate: could 90 days of aggressive paydown push you above a threshold that changes your rate offer significantly? Paying $2,000 extra on your highest-utilization card might boost your score 30–50 points, potentially saving more in loan interest than the extra payment cost.
The one risk every consolidation calculator leaves out
The calculator shows you interest savings. It does not show you what happens if you run the cards back up after consolidating. This is the most common outcome and the one that turns a good financial move into a worse position than where you started. If you consolidate $14,000 in credit card debt and then spend the freed-up credit over the next 18 months, you end up with both the consolidation loan payment and new card balances. The only way to prevent this is a mechanical one: freeze or cut the cards after payoff. Leave one open for credit score purposes, but make it genuinely inconvenient to use. That friction matters.
Personal loan vs. balance transfer: the decision framework
A balance transfer wins if: your balance is under $10,000, you can realistically pay it off within 15–21 months, and you qualify for a 0% promotional card. Under those conditions, a 3% transfer fee is far cheaper than even a 12% personal loan. A personal loan wins if: your balance is larger than a balance transfer limit allows, you need more than 21 months to repay, or the psychological benefit of a fixed end date helps you stay on track. For anything over $15,000 or any situation where you would not confidently pay off a balance transfer before the promo expires, the fixed-rate personal loan is the lower-risk choice.