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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:
1. 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.
2. 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. Dollar signs, percent signs, commas
and spaces will cause a JavaScript error.
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