We offer a wide range of loan solutions

Debt consolidation loan calculator

27 July2009

Our loan calculator isn`t just for personal loans - it can also help you to work out how much your monthly repayments might be on a debt consolidation loan.

Debt consolidation - a quick guide

A debt consolidation loan is a new loan big enough to pay off your existing debts. It can make managing your finances a lot simpler, as it means you`ll only have one payment to deal with each month, instead of many.

Many people also choose to reduce their monthly payments by repaying the debt consolidation loan over a longer period of time than their original debts. This can make your debt more manageable, and can free up extra cash for other purposes.

How to use the debt consolidation loan calculator

Before you start, you`ll want to add up all the debts you`re thinking of consolidating. The total will be how much you would need to borrow on your debt consolidation loan.

Once you have that, enter the amount into the `How much would you like to borrow?` field on our loan calculator.

The next step is to decide on the repayment period for your debt consolidation loan. The important thing is to make sure you can comfortably afford the repayments.

Secured loans may be available with a longer repayment period than unsecured loans, and may come with a lower interest rate - but you`ll need to use your home as security against the amount you borrow. Remember that failing to keep up on payments on a secured loan could result in your home being repossessed.

Finally, on the `How would you rate your credit history?` slider, select the type of credit rating that you feel most applies to you: Poor, Average or Good. (If you`re not sure, a professional adviser could help you figure it out.)

Note: our loan calculator is only an illustration, and the interest rate you are actually offered could vary depending on a number of factors, but you can assume that the better your finances, and the better you have managed your previous borrowing, the better your credit rating (and the better your chance of being offered a loan at all) will be.

Things to consider

It`s possible to save money overall by consolidating your debts, and it`s also possible to save money on a month-to-month basis - but doing both at the same time might not be possible.

For example, consolidating high-interest debts (such as credit cards) into a debt consolidation loan with a lower interest rate can enable you to pay less in the long run, if you repay it quickly enough. However, because a longer repayment period means paying interest for longer too, extending your repayment period reduces your chance of saving money overall, even though your monthly repayments will be lower.

For many people who take out a debt consolidation loan, though, the reduced monthly outgoings will be the most important thing, even if it means paying a little more in the long run.

If you`re unsure whether a debt consolidation loan could save you money, ask a debt adviser to help you do the calculations.

Fill in our form for your free loan quote

Related resources:

Tags: debt, consolidation, calculator, calculator for debt consolidation, calculator for debt consolidation loans, loans for debt consolidation, calculating debt consolidation interest rates, interest rates, loan rates, debt consolidation loan rates