What consolidation does and doesn't do
A debt consolidation loan is a personal loan that pays off your cards and other debts, leaving one fixed payment at one fixed rate for a set term. Personal loan rates averaged about 12% in September 2026, according to Bankrate, against more than 22% on cards that charge interest, according to the Federal Reserve. That gap is the whole appeal.
It doesn't reduce what you owe. It changes the price and the schedule. Whether it saves money depends on three things this calculator counts: the rate, the fee and the term.
The fee comes off the top
Many personal loans charge an origination fee, often between 1% and 10%, taken out of the money you receive. To clear $13,500 of cards with a 5% fee, you have to borrow about $14,200. The calculator grosses up the loan so the cards are fully paid.
A longer term can cost more
A lower payment feels like a saving, but stretching debt over five years at 12% can cost more interest than clearing it in two years at 22%. Compare the total cost line, not the monthly payment.
Fixed rate, and why that matters now
Most personal loans are fixed. Once you have one, a Fed rise doesn't change your payment. Card debt keeps moving with the prime rate.
