Worked example: three debts of £12,500
Take £6,000 at 24.9% APR paying £200 a month, £4,000 at 19.9% paying £130 and £2,500 at 29.9% paying £90. The payments come to £420.00 a month and clear the debts in 44 months, costing £18,233.02 in total, of which £5,733.02 is interest. Across the three, that is an overall rate of 24.35%.
Offer A is a £12,500 loan at 8.9% APR over five years: £256.80 a month and £15,407.77 in total, which saves £2,825.24 against keeping the debts. Offer B is the same loan at 7.9% over three years: £389.56 a month and £14,024.19 in total, saving £4,208.83. The cheapest is Offer B, which also has a lower payment than the £420.00 you pay now.
How your current debts are paid
Your debts are paid with the total of the monthly payments you enter. Each debt gets its own payment, and whatever is left of the total goes to the debt with the highest rate, so the total paid each month stays level until the last debt clears. The overall rate is the single rate at which that stream of payments is worth the total balance today. This is the method used by the calculator.net debt consolidation calculator. The APR convention field sets how every APR, on your debts and on the offers, becomes a monthly rate. Effective APR (FCA) is the default; APR divided by 12 is how many UK sites work, and the APRs shown are then worked out the same way. On the worked example the best offer saves £4,208.83 on the default basis and £5,338.98 with APR divided by 12, because your current debts cost more as well.
Fees, and the cash you may need
In the UK, the APR on a loan quote normally already includes compulsory fees, so type 0 in the fee field unless a charge is on top. If it is, the fee is taken out of the loan. A £11,000 loan with a 2% fee of £220.00 leaves less than your debts, so you need to find £1,720.00 yourself, and the APR with the fee is 9.84%.
A loan larger than your debts leaves cash over. Borrowing £15,000 against £12,500 of debts leaves £2,500.00 in your hand, and the saving is counted after taking that into account.
When keeping your debts is cheaper
A loan at a high rate over a long term can cost far more than the debts it replaces. A 29.9% APR loan over seven years and a 34.9% APR loan over ten years on the same £12,500 cost £9,323.07 and £21,656.77 more than keeping the debts, so the result says that keeping them costs £9,323.07 less than the best offer.
A longer term lowers the monthly payment but usually raises the total cost, so look at the total of payments as well as the payment.
Is consolidation right for you
Consolidation turns several debts into one new credit agreement. StepChange has a short set of yes or no questions on whether it might suit you and points you to debt advice if it does not. A lender's representative APR is only the rate it expects to offer many of its successful applicants, so your own quoted rate can differ. Enter the rate you are actually offered.
To see the payment on one loan, use the debt consolidation loan calculator.
To find the rate you are really paying with fees, use the consolidated loan interest rate calculator.
Use the right country page
This page uses UK terms, pounds and, by default, the UK effective APR convention, where a monthly rate is (1 + APR)^(1/12) − 1 (FCA CONC App 1.2). For a US comparison, with an origination fee and the nominal rate convention, choose United States above the form. Inputs reset and amounts are not converted.
Inputs for the UK consolidation loan comparison calculator
APR convention
Applies to every APR on the page, on your debts and on the offers. Effective APR (FCA) is the default and follows the FCA APR rule. APR divided by 12 is how many UK sites work and gives a slightly higher monthly rate.
Debt balance, APR and monthly payment
For each debt, what you owe, its yearly rate and what you pay each month. Leave the balance at 0 for an unused row.
Loan amount
How much each loan offer lends you, before any fee comes out.
Offer APR and term
The APR on the quote and how many years the loan runs.
Arrangement fee
A fee on top of the quoted APR, taken from the loan. Type 0 if the APR covers it.
CALCULATOR QUESTIONS
UK consolidation loan comparison calculator questions
Will a consolidation loan save me money?
Only if its total cost, with fees, is below keeping the debts. In the example, a 7.9% APR three-year loan saves £4,208.83 against keeping three card debts, but a 29.9% loan over seven years costs £9,323.07 more.
How is the overall rate on my debts worked out?
It is the single rate at which your payments over the time needed are worth the total balance. For the example debts it is 24.35%.
Why does the fee change the APR?
The fee is taken from the loan, so you receive less but repay the same. A 2% fee on an £11,000 loan at 8.9% APR lifts the APR with the fee to 9.84%.
What if the loan does not cover all my debts?
The shortfall is cash you must pay yourself. In the 2% fee example you would need £1,720.00.
Can I compare more than two loans?
This page compares two offers against your debts. Run it again with different offers to compare more.