Should you consolidate your debt? This calculator is designed to help determine if debt consolidation is right for you. Fill in your loan amounts, credit card or credit line balances and other outstanding debt. You can then see what your monthly payment would be with a consolidated loan.
- Interest rate
- Annual interest rate for your new consolidation loan.
- Term in months
- Number of months for your new consolidation loan.
- Up front costs
- Any fees you are required to pay up front to receive this loan.
- Savings rate
- This is the rate of return you would expect to make on your closing costs, if you were to invest them. This could include appraisal fees, loan origination fees, etc.
The actual rate of return is largely dependent on the type of investments you select. For example, from December 1999 to December 2009, the average annual compounded rate of return for the S&P 500 was -0.6%, including reinvestment of dividends. From January 1970 to December 2009, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.1% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 1% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.
- Include closing costs in loan
- If you fill in an amount in the Up front costs of the calculator and check the Include closing cost box, your loan balance, monthly payment and total interest paid will increase. You will, however, be required to pay less money up front. Including your closing costs in your loan may be a good option if you do not have funds available, or you can achieve a relatively high rate of return on your savings.
- Loan balance
- Loan amount owed is the total remaining balance on a loan. If you are uncertain of your exact balance, enter an estimate.
- Monthly payment
- Your current monthly payment.
- Months Left
- The number of months you have left to make payments on an installment loan.
- Credit card / Credit line balance
- The outstanding balance on your credit card or credit line. You do not need to include finance charges, they will be calculated based on your interest rate.
- Credit card / Credit line rate
- Annual interest rate you pay on outstanding credit card or credit line balances. This calculator assumes simple interest is charged every month at 1/12th of your annual rate.