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What is a Debt Consolidation Calculator?

What is a debt consolidation calculator?

  • A debt consolidation calculator is an online calculation tool that you can use to assess the benefits of taking out a debt consolidation loan. These loans are most often used to bundle up and to repay a range of other debts, such as overdrafts, credit card borrowings and other loans. The aim here is to find one loan with lower interest rates that will repay everything that you owe giving you lower monthly repayments, fixed interest and less to pay back in the long run.
What can a debt consolidation calculator tell you?

  • This kind of calculator simply allows you to look at your existing debt situation and to see how a debt consolidation loan could improve it. So, for example, you simply enter in details of your current debts and how much you have to pay on them every month. The calculator then knows what your monthly outgoings are on the borrowings you have. The calculator can then look at a debt consolidation loan as an alternative and show you how much you would be paying back on that basis instead.

    So, for example, if you owe £6,000 spread across four credit cards and pay back £40 a month on each then the calculator will tell you firstly that you pay £160 a month on repaying your debt here. Then it can help you find debt consolidation solutions that could help you cut down on your commitments. This will usually involve your filling in a few more fields on the calculator such as the length of loan you would prefer and your desired APR.

    The calculator will then show you how much your repayment would be for this kind of loan. It will also, in many cases, help you work out how long it will take you to repay your debts as they stand now and under the terms of a consolidation loan. You can then compare the two figures – in most cases the debt consolidation loan repayment will be far cheaper than your current borrowings. In some cases you may find that a general loans calculator will suit you just as well if you simply want to know the figures for your new loan.

Will the debt consolidation calculator help me find a loan?

  • In some cases a calculator will be offered as an ‘information’ product only. These calculators are usually found on general financial information sites and portals. Here, the calculator will not be linked to any specific loans and will simply do the complex repayment calculations for you.

    In others the calculator may be offered on a broker or financial institution site. In this case it will usually be linked to loans that the site deals with so that you can compare actual rates and products to see how they compare. Using the calculator to help you assess repayment rates does not commit you to using the products it is linked to but, if you find a loan that looks good, you’ll often to be able to start applying online.

    Using this kind of calculator can be a quick and easy way of assessing just how much a debt consolidation loan could save you compared to your current situation. So, if you are considering taking up this option then this could be a great place to make a start.
| Serious Debts | Debt Counselling | Debt Consolidation Program | Debt Consolidation calculator | Debt Consolidation Case Study | Debt Consolidation Companies | 30 days grace from debt collectors |
| Loans | Mortgages | Debt Consolidation is a Bad Idea | County court claim - what to do | Move abroad - will all debts be written off | Interest free deals can get you into debt |