Add all your current debts, enter a consolidation loan offer and get a clear, data-driven verdict — monthly saving, total interest saved, your blended rate and whether consolidation genuinely makes financial sense.
Red = current combined monthly payments. Green = new consolidation loan payment.
Enter your debts above to see the comparison.
| Metric | Before | After | Difference |
|---|---|---|---|
| Add your debts to see the comparison | |||
Debt consolidation replaces multiple high-rate debts — credit cards, overdrafts, store cards, personal loans — with a single lower-rate loan. When done right, it can save thousands of pounds and simplify your finances to one payment. When done wrong, it can cost significantly more. This calculator gives you the honest numbers to make the right call.
Your blended rate is the weighted average interest rate across all your debts. It is calculated by multiplying each debt's balance by its rate, summing those figures, then dividing by your total debt balance. It is the benchmark against which any consolidation loan must be measured.
Example: £3,500 at 22.9% + £6,000 at 12.5% + £800 at 39.9%. Blended rate = (3500×22.9 + 6000×12.5 + 800×39.9) ÷ 10,300 = 18.7%. Any consolidation loan under 18.7% saves interest — if the term is not dramatically extended.
A lower rate alone does not guarantee savings. A 10% consolidation loan over 7 years on £10,000 costs £3,869 in interest. The same debts cleared individually at higher rates but in 3 years might cost less total interest. Always check both monthly saving and total interest — this calculator shows both.
The most common way consolidation backfires is choosing a term that is too long simply to get a lower monthly payment. A £10,300 consolidation loan at 8.9% over 7 years costs £3,507 in interest. Your original debts at 18.7% blended, cleared aggressively in 3 years, might cost only £1,600. Our calculator flags this with a clear warning when total interest increases despite a lower rate.
Use the table below as a quick reference. The calculator above gives you the precise numbers for your specific debts.
| Situation | Consolidation Rate vs Blended Rate | Term vs Current Payoff | Verdict |
|---|---|---|---|
| Ideal scenario | 3–5% lower | Same or shorter | ✅ Strong — saves interest and monthly |
| Good scenario | 1–3% lower | Slightly longer | ✅ Worth doing — check total interest figure |
| Marginal | 0–1% lower | Much longer | ⚠️ Caution — monthly saving but more total interest |
| Counterproductive | Same or higher | Any | ❌ Avoid — pays more in interest overall |
| Balance transfer card | 0% for 12–24 months | Short promo period | ✅ Best option if available and discipline is maintained |
Several UK-specific factors affect whether consolidation delivers its promised savings. Always account for these before applying:
UK lenders can charge up to 2 months' interest as an ERC when you repay a personal loan early. If you have a large existing loan at a good rate, the ERC may cancel out the interest saving from consolidating. Always check your loan agreement for "early repayment" or "settlement charges" before agreeing to consolidate.
Some consolidation loans carry an arrangement fee of £50–£500. This fee is included in the APR calculation, but only if the lender adds it to the loan balance. If paid upfront, it increases the effective cost. Enter any arrangement fee in the calculator above for the most accurate comparison.
Applying for a consolidation loan triggers a hard credit search (-5 to -10 points). However, if you clear revolving credit (cards, overdraft), your credit utilisation drops significantly — potentially adding 20–50 points within 1–2 months. Net effect is usually positive within 3 months.
The single biggest risk of consolidation is "reloading" — clearing credit cards with a consolidation loan and then spending on the cards again, leaving you with both the consolidation loan and new card debt. If you consolidate, cut or freeze the cards. This is a behavioural issue, not a financial one.
If your total debt is under £5,000 and your credit score is good (700+), a 0% balance transfer credit card for 18–24 months will almost certainly beat any consolidation loan on cost — if you make consistent payments to clear the balance before the promotional period ends. Our calculator compares loans, but always check 0% card availability first via a soft-search eligibility checker.
The table below shows the default scenario loaded in the calculator: a credit card, personal loan and overdraft with a combined blended rate of 18.7%, consolidated at 8.9% APR over 48 months.
| Debt | Balance | Rate | Min. Payment | Est. Payoff |
|---|---|---|---|---|
| Credit Card | £3,500 | 22.9% | £105/mo | ~48 months |
| Personal Loan | £6,000 | 12.5% | £200/mo | ~37 months |
| Overdraft | £800 | 39.9% | £30/mo | ~36 months |
| Total (before) | £10,300 | 18.7% blended | £335/mo | — |
| Consolidation Loan | £10,300 | 8.9% APR | ~£257/mo | 48 months |
In this example, consolidation saves approximately £78/month and £900–£1,200 in total interest, while simplifying three payments into one. The consolidation makes clear financial sense because the rate is almost 10 percentage points below the blended rate and the term is not dramatically extended.
Your blended rate is the weighted average rate across all your debts, calculated in proportion to each debt's balance. It is the single most important number when evaluating consolidation — any consolidation loan rate below your blended rate will save you interest, assuming the term is not dramatically extended. Our calculator computes your blended rate automatically as you enter your debts.
Applying triggers a hard search that temporarily reduces your score by 5–10 points. However, if you use the consolidation loan to clear revolving debts like credit cards and overdrafts, your credit utilisation ratio falls sharply — which typically adds 20–50 points within 1–2 months. Net effect on credit score is usually positive within 3 months, provided you do not reload the cleared credit accounts.
Consolidation is counterproductive when: (1) the consolidation rate is higher than your blended rate; (2) the term is so long that total interest exceeds your current debts; (3) early repayment charges on existing loans cancel out savings; or (4) an arrangement fee makes the effective APR much higher than the advertised rate. This calculator identifies all four scenarios and flags them with a warning verdict.
Almost always no. Securing unsecured debts (cards, loans) against your home converts them into secured debt — if you miss payments, you risk repossession. Mortgage rates are lower than unsecured loans, but the term is typically 20+ years, meaning total interest paid on what was originally a small credit card balance can be enormous. This calculator is designed for unsecured debt consolidation only.
Most mainstream UK lenders require a minimum Experian score of around 580–600 (Fair band) for a personal consolidation loan. For the best rates (under 10% APR), you typically need 700+ (Good). If your score is below 580, consider a credit union loan (typically 3% monthly interest = ~42% APR) or work on improving your score first using our Credit Score Improvement Simulator.
The figure is based on each debt's minimum payment being maintained throughout. In practice, minimum payments on credit cards often decrease as the balance falls (most issuers set minimums at 1–3% of balance), meaning your actual current total interest cost could be higher — making consolidation look even more favourable. The calculator uses a fixed minimum payment, which produces a conservative estimate of savings.