Debt Consolidation Calculator
This calculator compares what you pay now across several debts with a single consolidation loan at one rate and term. Enter up to three debts — the balances, rates, and consolidation rate are examples you can edit.
How this calculator works
Debt consolidation replaces several debts with one loan, usually at a lower rate and with a single monthly payment. Whether it saves money depends on the new rate, the term, and the fees.
Formula: each existing debt is amortised at its own rate over the term using P × r / (1 − (1 + r)^−n). The current monthly payment is the sum of those payments, and the current total interest is the sum of the interest on each debt. The consolidated loan amortises the summed balance at the new rate over the same term.
Consolidation can lower the monthly payment in two ways: by reducing the average interest rate, and by stretching the repayment over more months. Stretching the term lowers the payment but can raise the total interest, so compare the total cost, not just the monthly figure.
Watch the term. Rolling a five-year debt into a ten-year loan may halve the payment while nearly doubling the interest. A consolidation loan also turns unsecured debt into a single obligation; if it is secured against your home, the lender could take the asset if you default.
This is an illustration, not a quote. Fees, insurance, and the rate you are actually offered will change the result. A non-profit credit counsellor or a licensed insolvency trustee can help if the underlying problem is that the debt is unaffordable, not just expensive.
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Frequently Asked Questions
Does consolidation always save money?
No. It saves money when the new rate is low enough and the term is not stretched so far that extra months of interest outweigh the lower rate.
Will consolidation hurt my credit?
A new loan usually means a hard credit inquiry and a new account, which can lower your score slightly at first. On-time payments over time can help.
Should I secure a consolidation loan against my home?
A secured loan often has a lower rate, but your home is at risk if you default. Weigh the lower cost against the possibility of losing the asset.
What if I cannot afford the consolidated payment?
Speak with a non-profit credit counsellor or a licensed insolvency trustee. A consumer proposal or debt management program may suit your situation better than another loan.
Last updated: September 16, 2026 · By the Instalment.ca Editorial Team
We research Canadian lending rules and update these pages when the law, the data, or the available offers change. We are not a lender and we do not provide personal financial advice.
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This is general information, not financial, legal, or tax advice.
Rates and terms vary by lender, creditworthiness, and province. Figures shown are examples only.