Debt Consolidation Calculator - Calculatorall.com
This debt consolidation calculator can be used for comparing APR of debts and their real APR once the consolidation loan fee has been adjusted. You can also use this debt consolidation calculator for comparing monthly payments, total interests, payoff length, etc. Usually, fee-adjusted APRs are considered actual financial costs of loans and debts. So, you can also consider it as a major indicator when it comes to selection of debt consolidation loans.
What Is Debt Consolidation?
Debt consolidation refers to a kind of restructuring of your debts that require a loan for paying off several others. Usually, you go for a low interest option for paying off your high interest loans. There are, basically, a couple of reasons as to why people opt for debt consolidation. First is to lower down the rates of interest they're paying on their current loans and the second is to lower down their monthly payments. And, if they are able to find an appropriate loan, they might be able to get both these benefits.
Most common debt consolidation loan options are the home equity loan, cash-out refinancing, personal loan and home equity line of credit. Out of these options, the home line of credit, home equity loan and the cash-out refinancing options are secured with some real estate property. This helps in cutting down the risk for lenders. The benefit for the borrower, however, is that they qualify for a lower interest rate. The personal loans, on the other hand, are unsecured loans and usually have higher interest rates associated with them. Besides, the loan limit is also lower as well. There is some upfront fees associated to many of these loans as well. More often than not, these upfront fees tend to be quite expensive. So, real cost or real APR for these loans tends to be higher than interest rates being offered by lenders. This debt consolidation calculator here gives you real APR values for loans after adjusting the fee. Real APR for a loan serves as a major indicator when it comes to picking a loan. So, this debt consolidation calculator can be used for the same as well.
Monthly payments are considered by many lenders as a major indicator when it comes to selling out their loans. However, it often proves to be quite misleading. Monthly payments do not often account for upfront fees. In addition, it is easy to manipulate these with the adjustment of loan length/term.
Even though you can use this debt consolidation calculator to find good consolidation loans that can slightly lower the financial burden on you, real solution for many of us is changing our habits - so, start saving, refrain when buying and live within your means or even below them.
How This Debt Consolidation Calculator Works?
The debt consolidation calculator gives you 10 fields for specifying information for your 10 different loans that you may want to consolidate with a consolidation loan. Besides, you can add up further rows and up to 100 different loans can be added. The information that you have to specify regarding your current loans include debt name, remaining balance, minimum or monthly payment, and interest rate. Remember that you have to provide all these values for at least one loan that you may want to consolidate.
Once you have provided all this information, the debt consolidation calculator requires you to provide information related to your consolidation loan. This information includes the loan amount, rate of interest, loan term and the loan fee or points.
After providing all the information, just hit the calculate button and your debt consolidation calculator will show you the results, giving you great insights into your consolidation loan. The information presented to you first includes APR of the current debts. Then it tells you the real APR for the consolidation loan while taking into account any associated fee. After presenting this information, the calculator tells you what the financial cost of your consolidation loan is like and whether it’s a viable option for debt consolidation or not. You also get the figures for loan fee that you will have to pay and the loan amount you can get in return for paying off any of your remaining balances. The last figure here is what you'll be able to keep after consolidation of your existing loans.
The debt consolidation calculator also gives you a tabular representation of your existing debts as well as your consolidation loan. The table shows the comparison of the two loans with respect to Real APR, monthly payments, payoff length, loan fee/points, upfront cash flow for loan consolidation, total payments and total interests.
So, use this debt consolidation calculator for determining which loan options are best to be used for the consolidation of your debts. Get real insights into your existing debts and the loan options available for consolidation purposes and choose the one that is best suited to your specific consolidation requirements.