Debt consolidation involves combining multiple debts into a single new loan, typically with a lower interest rate or more favorable repayment terms. This simplifies your payments and can potentially save you money on interest.

The calculator compares your current debts (total amount, interest rates, and monthly payments) against a proposed consolidation loan. It calculates your potential savings, new monthly payment, and how long it will take to pay off your debt.

You can consolidate various unsecured debts including credit card balances, personal loans, medical bills, and other high-interest obligations. Secured debts like mortgages or auto loans generally cannot be consolidated with this method.

Initially, you may see a small dip in your credit score when you apply for a new loan. However, by making consistent on-time payments and reducing your credit utilization, debt consolidation can ultimately improve your credit score over time.

Some lenders charge origination fees (typically 1-6% of the loan amount) or prepayment penalties. Always review the loan terms carefully and factor in any fees when calculating your potential savings.