Debt Consolidation Savings Calculator — 公式
## Debt Consolidation
Consolidation replaces multiple high-rate debts with a single lower-rate loan.
### When It Makes Sense
- Your new rate is significantly lower than your current average rate
- You will NOT run up new debt on the freed credit cards
- The total cost (including fees) is less than your current path
### Formula
Both scenarios use the standard loan payment formula:
**M = P x r x (1+r)^n / [(1+r)^n - 1]**
The difference in total interest between old and new rates is your savings.
Consolidation replaces multiple high-rate debts with a single lower-rate loan.
### When It Makes Sense
- Your new rate is significantly lower than your current average rate
- You will NOT run up new debt on the freed credit cards
- The total cost (including fees) is less than your current path
### Formula
Both scenarios use the standard loan payment formula:
**M = P x r x (1+r)^n / [(1+r)^n - 1]**
The difference in total interest between old and new rates is your savings.
计算示例
$25,000 at 22% average vs consolidation at 10% for 5 years.
- New payment = $25,000 at 10% for 60 months = $531
- New total interest = $531 x 60 - $25,000 = $6,874
- Old total interest at 22% = $707 x 60 - $25,000 = $17,418
- Interest savings = $17,418 - $6,874 = $10,544