Before You Consolidate: Seven Numbers to Compare

By PDC Editorial Team · Published August 8, 2026 · Last reviewed August 8, 2026 · 2 min read

Before you accept a debt consolidation loan there are seven figures worth writing down — once for your current debts, and once for the loan being offered. If you cannot fill all seven in, you cannot yet tell whether the loan helps.

1. The interest rate

For your existing debts this means each individual APR, or a weighted-average APR across the balances. For the loan it means the APR the lender is offering you, not the advertised range.

2. The total required monthly payment

Add every minimum payment you currently must make on the debts the loan would pay off, and compare that with the single new payment. The difference is your monthly cash-flow change — useful information, but not the same thing as savings.

3. The repayment term

Your existing balances have an implied payoff period based on what you are paying now. The loan has a stated term in months. If the loan term is longer, expect a lower payment even at the same rate — and expect more total interest.

4. Fees

Origination fees are the most common on personal loans and are frequently deducted from the disbursed amount. There may also be late fees, returned-payment fees, or, on a balance transfer, a transfer fee expressed as a percentage of the balance.

5. Estimated total repayment

Multiply the monthly payment by the number of months and add any fee that was not financed. Do the same estimate for your current path. This is the single comparison that answers whether the loan costs more or less overall.

6. Fixed or variable rate

A fixed rate keeps the payment predictable for the whole term. A variable rate can rise, which changes both the payment and the total.

7. Prepayment terms

If you intend to pay the loan off early, confirm in writing that there is no prepayment penalty, and ask how additional payments are applied to principal.

Two things that are not numbers

• Consolidating unsecured debt into a loan secured by your home or vehicle changes what is at risk if you cannot pay. That is a different kind of decision, not a cheaper version of the same one.
• Paid-off cards usually stay open. If new balances accumulate on them, you end up carrying the loan and the cards together.

What to do next

Put the seven figures side by side on one page — current path in one column, proposed loan in the other. Get the loan column from a written offer, not an estimate, and decide only once both columns are complete.