| When the typical debt-consolidation company
advertises that they can "save you money," what they are most often referring
to is simply a reduction in your total monthly debt payments -- not a savings
in the cost of paying off your debt (interest charges). Sure, by consolidating
your payments into a single loan, you might be paying one monthly payment that
is smaller than the sum of your current monthly payments, but if they stretch
your loan out for a longer period of time you could actually end up paying more
interest by consolidating. This calculator will help you to determine whether
or not consolidating will actually reduce the cost of retiring your debts. |
Instructions: Starting with the first line of entry fields, enter each
one of your debts, along with their corresponding principal balances, interest
rates and monthly payment amounts (the last two columns will be filled in by the
calculator). Once you have entered all of the debts you wish to consolidate, click
on the "Compute Current Debt Cost" button. Next, enter the consolidating loan's
interest rate, term and any origination fees that might apply and click the "Compute
Consolidation Loan Costs" button.
IMPORTANT: In order for the this
calculator to work, each debt must have the four left-hand fields filled in (for
interest-free debts enter .001 just to satisfy the required interest-rate entry).
Also, be sure to enter only numbers and decimal points in the numeric entry fields.