Debt Consolidation Calculator
Combining several debts into one loan lowers your interest rate. Whether it lowers your total cost is a different question, and the answer turns on tenure and fees rather than on the rate you are quoted. This calculator works out both, and tells you the rate above which the deal stops being worth taking.
What you currently owe
Enter each borrowing separately. Use the outstanding balance, not the original amount.
The consolidation loan you are considering
Your monthly outgo falls by Rs.5,801, from Rs.17,200 across 2 payments to a single EMI of Rs.11,399.
Consolidation stops making sense above 19.4% p.a. at this tenure and fee. If a lender quotes you more than that, walk away.
Where the money goes, either way
KharchaUdhar Insider Tip
The number that decides this is not the interest rate. It is the tenure. A consolidation loan at 14% over 60 months will very often cost more in total than card debt at 42% that you were going to clear in 20 months anyway, because you are paying a lower rate for three times as long. Set the tenure to roughly match how long your existing debts would have taken, then compare. If the EMI at that tenure is unaffordable, consolidation is not solving your problem, it is postponing it.
KharchaUdhar Insider Tip
Consolidation only works if the cleared cards stay cleared. In lending portfolios, a recognisable share of consolidation borrowers rebuild a card balance within a year and end up servicing both the consolidation loan and fresh card debt. If you cannot commit to leaving the cards at zero, ask the lender to disburse directly to the card issuers rather than to your account, and reduce the card limits once they are paid off.
Indicative only. All calculations use the reducing balance method. Actual offers depend on your credit profile, income, and the lender's assessment. Foreclosure charges on your existing borrowings should be confirmed with each lender before you commit, as they vary and some loans carry a lock-in during which prepayment is not permitted at all.
What this calculator actually does
Most consolidation calculators compare your blended interest rate against the rate on offer and stop there. That comparison is close to meaningless, because it ignores the two things that decide the outcome: how long each of your existing debts would have taken to clear at your current payments, and what it costs to exit them.
This tool computes the remaining life of each debt from your actual monthly payment, totals the interest you would still pay if you changed nothing, then compares that against the full cost of the consolidation loan including processing fee and foreclosure charges. The result is a rupee figure rather than a percentage, because a rupee figure is what you can act on.
It also solves for your break-even rate. That is the interest rate at which consolidating and not consolidating cost exactly the same, given your tenure and fees. Any quote above it makes you worse off, which makes it a useful number to have in your head before a lender calls.
How to use it
- List every debt separately. Enter the outstanding balance, interest rate, and what you currently pay each month for each borrowing. Use the outstanding balance, not the original loan amount.
- Add exit charges. Enter the foreclosure or prepayment charge for each existing loan. Credit cards carry none. Personal loans commonly charge a percentage of the outstanding, and some have a lock-in during which prepayment is not permitted at all.
- Enter the consolidation offer. Add the rate, tenure, and processing fee of the loan you are considering. Set the tenure to roughly match how long your current debts would have taken to clear, then compare.
- Read the break-even rate. The result shows your total saving or loss and the rate above which consolidation stops working. Use that number as your walk-away threshold when negotiating.
Common questions
Does debt consolidation always save money?
No. It saves money only when the interest saved exceeds the processing fee, the foreclosure charges on your existing loans, and the extra interest created by a longer tenure. Consolidating 42% card debt into a 14% loan looks obviously beneficial, but if the new tenure is three times longer than the time you would have taken to clear the cards, the total cost can rise even though the rate fell.
Will consolidating my debts hurt my credit score?
There is a short-term dip from the hard enquiry and the new account, typically recovering within a few months. Beyond that the effect is usually positive, because paying off credit cards sharply reduces your credit utilisation, which carries roughly 30% weight in scoring. Since 1 July 2026 lenders report to the bureaus weekly, so that utilisation improvement now appears on your report within about seven to ten days.
What interest rate makes consolidation worthwhile?
There is no universal figure, because it depends on your existing rates, your remaining tenures, and the fees. This calculator solves for your specific break-even rate, which is the rate above which consolidation starts costing you money at your chosen tenure. Anything a lender quotes above that number should be declined.
Should I close my credit cards after consolidating?
Reduce the limits rather than closing the accounts. Closing a card removes its limit from your total available credit, which pushes your utilisation ratio up on the same spending, and closing an old card shortens your credit history. Both hurt your score. Reducing the limit removes the temptation without either penalty.
Can I consolidate if my credit score is low?
It becomes harder and more expensive. Below roughly 700 most banks decline, and NBFCs that lend in the 650 to 700 band price the risk in. At a high enough rate consolidation stops being worthwhile, which is exactly what the break-even calculation here is for. If your score is the binding constraint, fixing utilisation first and applying a few weeks later is often the better sequence.