Debt Consolidation Calculator

The calculator does one job. It adds up every debt you have entered, works out what those balances cost you each month at their current rates, and sets that against a single loan at a single rate over a single term. Nothing more clever than that is happening behind the screen.

The three figures worth your attention

• The monthly difference. What you currently pay across every debt, against one consolidated repayment.
• The total interest over the full term. This is the honest number, and it often moves in the opposite direction to the monthly one.
• The date the loan clears. A consolidated loan on a longer term finishes later, even when it feels cheaper today.

Most people read the monthly difference and stop there. Read all three together. A result that cuts your monthly outgoings sharply and raises your lifetime interest can still be the right decision if cash flow is the thing breaking you. It should be a decision you make deliberately, not one you back into.

If the monthly figure barely moves, that is useful information too. It usually means the problem is the size of the debt rather than the shape of it, and a different conversation is needed.

Every calculator is a model, and a model is a set of assumptions written out in arithmetic. These are ours, stated plainly so you can judge how far to trust the output.

• Rates hold steady for the whole term. Variable rates move. A twenty-five-year projection built on one rate is a straight line drawn through weather.
• Every repayment is made on time and in full, and no month is missed.
• No new debt is added. If the cards return to their old balances after consolidation, the model is describing a situation that no longer exists.
• Interest is calculated on the reducing balance and charged monthly. That is the common structure, not the only one.
• A revolving balance such as a credit card is treated as a fixed amount rather than one that keeps turning over.
• Fees are zero unless you type them in.

None of that makes the result useless. It makes it a starting point you should stress-test. Run it again at a rate a percentage point or two higher than the one you expect and see whether the plan still holds. If it only works at the best possible rate, it is not a plan yet.

Consolidation has costs that sit outside the repayment comparison. They do not usually change the direction of the answer, but they change the size of it, and a few of them surprise people at settlement.

• Application and establishment fees on the new loan.
• Valuation fees, legal and settlement costs.
• Discharge fees on the loans being paid out, and break costs where a loan is on a fixed rate.
• Lenders mortgage insurance, if the new loan takes you past a lender's loan-to-value threshold.
• Ongoing account or package fees on the new facility.
• Mortgage registration and other government charges.
• Any difference between your statement balance and the actual payout figure.

That last one catches people. The balance printed on a statement is rarely the payout figure. Interest accrues to the settlement date, and some lenders add an early termination amount on top. Ask every creditor for a written payout quote to a nominated date before you treat any total as final.

The tool also takes no view on tax. Whether interest on a consolidated loan is deductible depends on what the borrowed money was used for and on your own circumstances. That is a question for a registered tax agent, not for a calculator and not for a broker.

Consolidation buys breathing room. It usually pays for that room with time. A three-year personal loan folded into a twenty-five-year mortgage costs less every month and more in total, because interest is charged for far more months.

Turning unsecured debt into secured debt is the part people skim past. A card provider has limited recourse. A mortgagee has your house. That does not make consolidation wrong, and for most of the businesses we work with it is the sane move. It does make it a decision that deserves a proper conversation rather than a click.

There is also a version of this where the arithmetic does not work. If the plan only balances by stretching the term to its limit and you are still short every month, consolidation is not the right tool. In that case the honest next step is advice from your accountant, or from a registered insolvency practitioner where the business is genuinely unable to pay its debts as they fall due. We will tell you when we think that is where you are.

1. 01

   Write the list down properly

   Every balance, every rate, every minimum repayment, every lender. From statements, not from memory. Half the value of this exercise is seeing the whole list on one page for the first time.

2. 02

   Get written payout figures

   Ask each creditor for a payout quote to a nominated date. That is the number a lender funds at settlement, and it is often not the number on the statement.

3. 03

   Work out what security you have

   A recent rates notice and a realistic sense of what the property is worth is enough to start the conversation. The lender's valuer sets the figure that counts.

4. 04

   Bring it to a broker

   More than forty lenders sit on our panel and they do not assess a file the same way. Which one sees it first changes the outcome more than most people expect.

A first conversation costs nothing and commits you to nothing. If consolidation is not the answer for you, we would rather say so early than take you through an application that was never going to land.