Debt Recycling Calculator

By CalculatorBolt Team | Published: | Updated: | Reviewed by: Finance & Loan Editor

Calculate savings from debt consolidation or refinancing. Enter existing debts and new loan terms. Compare monthly payments and total interest. Informational only—consult a financial advisor.

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Existing Debts

Debt Name Balance ($) Rate (%) Monthly Payment ($) Actions

New Consolidation Loan

Total amount to consolidate
Must be > 0
Repayment period
Must be > 0
Annual percentage rate
Must be ≥ 0

Results

Monthly Savings

$0

Interest Savings

$0

Total Savings

$0

Parameter Current Debts New Loan Difference

Preset Scenarios

Export/Import

How it works

Total Old Payment = Σ(Monthly Payments). We sum up all your current debt payments. For the new loan, we use the standard amortizing loan formula: New EMI = New Loan Amount × [r(1+r)^t] / [(1+r)^t-1] / 12, where r is the monthly interest rate and t is the number of months. We then compare the total costs of your current debts with the new consolidated loan to find potential savings.

Total Old Monthly Payment = Σ(Monthly Payments)
Monthly Interest Rate (r) = Annual Rate / 100 / 12
Months (t) = Years × 12
New Monthly EMI = Loan Amount × [r × (1 + r)^t] / [(1 + r)^t - 1]
Total Interest Savings = Old Interest - New Interest

Inputs explained

Existing Debts Table
Enter each debt with its name (e.g., "Credit Card 1"), current balance, interest rate (annual %), and your current monthly payment. You can add multiple debts.
New Loan Amount
The total amount you want to borrow to pay off all existing debts. This should typically equal the sum of all debt balances.
Loan Term
The repayment period for the new loan in years (e.g., 5 years).
Interest Rate
The annual percentage rate (APR) for the new consolidation loan. A lower rate compared to your existing debts will result in savings.

Example

Scenario: You have two high-interest debts and want to consolidate them.

Current Debts:

  • Credit Card: $5,000 balance @ 18% APR, $200/month payment
  • Personal Loan: $10,000 balance @ 12% APR, $300/month payment
  • Total Old Monthly Payment: $500

New Consolidation Loan:

  • Loan Amount: $15,000
  • Term: 5 years
  • Interest Rate: 8% APR
  • New Monthly Payment: ~$304

Savings:

  • Monthly Savings: $500 - $304 = $196/month
  • Total Interest Savings: ~$3,800 over 5 years

Tips & notes

  • A lower interest rate is the main driver of savings. Aim to consolidate high-interest debts (like credit cards at 15-20%) into a lower-rate loan (8-12%).
  • Extending the loan term can lower monthly payments but may increase total interest paid over time.
  • Consider fees and closing costs when refinancing. Some lenders charge origination fees that can offset your savings.
  • Check your credit score before applying. A higher score typically qualifies you for better interest rates.
  • Don't take on new debt after consolidating. Consolidation works best when paired with disciplined spending.
  • Compare offers from multiple lenders to find the best rate and terms.

FAQs

Debt recycling (also called debt consolidation) means paying off old debts with a new, preferably lower-interest loan. This can reduce your monthly payment and total interest paid.

It can be if you get a lower interest rate and can afford the new payment. However, consider all fees and the impact on your credit score before consolidating.

It depends on the difference in interest rates and terms. Typically, moving from high-interest credit cards (18%+) to a lower-rate personal loan (8-12%) can save thousands in interest.

Most unsecured debts like credit cards, personal loans, medical bills, and payday loans can be consolidated. Secured debts like mortgages and auto loans are typically not included.

Initially, it may cause a small dip due to the hard inquiry. However, if you make on-time payments and reduce your credit utilization, your score can improve over time.

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