Compare paying several high-cost debts with one consolidation loan, after fees.
Use this calculator to see whether replacing several expensive debts with one consolidation loan makes sense. These might be revolving credit card balances, small app loans and an overdue personal loan.
How to fill it in: add up the balances you would pay off. For the average rate, weight each debt's rate by its balance. For example, ₹1,50,000 at 42% and ₹2,50,000 at 23% average about 30% (₹1,50,000 × 42 + ₹2,50,000 × 23 = ₹1,20,50,000; ÷ ₹4,00,000 ≈ 30.1%). Enter the rate and processing fee on the offer you have, including 18% GST on the fee.
Formula: both payments use the standard EMI over the same period. Net saving = monthly difference × months − costs.
Worked example (illustrative): ₹4,00,000 at an average 30% over 3 years costs about ₹16,981 a month. A consolidation loan at 14% costs about ₹13,671, so you save about ₹3,310 a month. A 2% processing fee of ₹8,000 plus GST is ₹9,440, recovered in 3 months. Net saving is about ₹1,09,705.
Limits: the saving is real only if you close the old cards or stop using them. If the old debts are already overdue, a new lender may refuse you, and an offer that looks too easy may come from an unregulated app. Read debt consolidation maths first.
Worked examples and checklists
How to calculate whether a consolidation loan saves money: weighted average rate, fees with GST, tenure trap, secured options like gold or LAP, and when consolidation fails.
