Debt Consolidation Savings Calculator

Saturday, January 29th

You may have heard about Debt Consolidation. In today's economic times, it seems like many people are trying to take out a loan, or consolidate the ones they have. But what is debt consolidation really? And how can it save you money?

What is debt consolidation?

Simply put, debt consolidation involves a loan you take out in order to pay off your unsecured bills, such as credit cards. It may seem strange to think, in order to pay off your loans sooner, you'll take out another loan - but it really can work! Let's examine how.

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Loan Savings Calculator

To show you how much money you could save with debt consolidation, we've put together a simple calculator. In our initial example, This person has:

A total credit card balance of $40,000
An loan Annual Percentage Rate (APR) of 21.9%
Monthly payments of $850

You can see that with a consolidated loan of 13.9%, they will save more than $30,000 over the life of their loan! Feel free to change the values to match your financial situation.

LOAN SAVINGS CALCULATOR

Credit Card Balance:

Current Interest Rate:

Monthly Payment:

NEW Interest Rate:

Time Saved:

Money Saved:

How can a debt consolidation company save you money?

Specifically, a Debt Consolidation Company can help save you money by:

Giving you a consolidated loan with a lower interest rate than your current credit card companies
Giving you a lower payment each month
Reducing the time you'll spend paying off your loans

Nothing to lose

Of course, your actual savings will be dependent on your financial condition and the quality of the debt consolidation company you choose to work with. Since most reputable companies have a free initial consultation, you really have nothing to lose!

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Debt Consolidation Company FAQ

What is debt consolidation?

Debt consolidation is a strategy used to help consumers get control over high-interest debt and simplify their monthly payments. Instead of having multiple credit card bills and other accounts to pay, often with extremely high interest rates, debt consolidation reduces those individual debts into a single payment each month.

Is debt consolidation something I should consider? Do I qualify?

You may need to have a certain amount of unsecured debt to be accepted into a debt consolidation program (for example, $7,500 or more). If you're struggling to keep up with the minimum payments on your credit cards and loans, you could be a great candidate for debt consolidation.

Isn't debt consolidation basically taking out a loan?

That depends on the service, but yes: most debt consolidation programs give you a loan to pay off all of your outstanding debts. These loans usually have much lower interest rates and can help you get on top of your financial situation again.

Are there alternatives to debt consolidation?

Sure! You could try getting a traditional loan from your bank or credit union, borrow money from friends or family to pay off debts, or work on your side hustle to make extra cash to pay down what you owe. But, chances are good that you've tried that already and still find yourself struggling financially. Debt consolidation could help you handle it once and for all.

Will using a debt consolidation service improve my credit history?

It should. One of the biggest black marks on your credit score is having late or missed payments, and consolidating all of your debt into one monthly payment makes it more likely you'll pay on time.

How much will a debt consolidation plan cost?

That varies. Some providers don't charge anything for their services, offering counseling and other tools to teach you how to manage your money and pay down your debts. Or, if you're taking out a loan to pay off higher-interest accounts, your fees will include your interest and any other charges associated with your application. Be sure to get your plan in writing before you make a commitment, so that you'll know what to expect.

Is there a satisfaction guarantee?

Most of the time, no. If you take out a debt consolidation loan, it's on you to understand all of the terms and conditions before you sign off. However, there are a few fee-based services that do offer a 100% satisfaction guarantee that allows you to cancel without penalty.

Is debt consolidation legitimate?

Absolutely. Thousands of people use debt consolidation programs every year to tackle their toughest credit problems. It's a good idea to check out the reputation of any program you're considering: find out what other clients say about their experiences, see if the BBB has rated the company, and determine for yourself if their debt consolidation services are worth your time and (possibly) money.