Debt Consolidation Calculator: See Your New EMI First

A debt consolidation calculator has two halves. The first is what you pay now: each debt's balance, interest rate and monthly payment. The second is the new loan: its rate, tenure and processing fee.

From those numbers it works out four things:

• how many months are left on each current debt

• the total interest you still owe on them

• the EMI of the new loan

• the total interest on the new loan

Then it sets the two side by side. That is the whole idea behind a loan consolidation calculator, and it is the same tool under a different name.

The result answers a plain question: does one loan cost you less, or does it only make the monthly figure look smaller? If you want the maths behind each EMI, read our guide on how EMIs are calculated.

Gather these before you start. A consolidation loan calculator is only as good as the numbers you type in.

For credit cards, enter the amount you realistically expect to pay each month, not just the minimum due if you usually pay more. If your payment varies, run more than one scenario to see how different payment amounts affect your estimated repayment period and interest cost.

If the word "outstanding" is confusing, see our page on the outstanding balance on a credit card.

The calculator compares your current monthly payments, estimated remaining interest and projected debt-free date with the EMI, interest cost and repayment period of a proposed consolidation loan. Its verdict is based on these estimates, so check the assumptions, fees and lender's final offer before making a decision.

It also gives a one-line verdict. That will be one of three: lower EMI and less interest; lower EMI but more total interest, so try a shorter tenure; or consolidation doesn't help at these numbers.

Here is an example (illustrative; before GST and fees). A card of ₹30,000 at 3.5% a month with ₹2,000 paid, a personal loan of ₹1,00,000 at 1.5% a month with ₹3,500 paid, and a BNPL balance of ₹20,000 at 2.5% a month with ₹1,000 paid.

The lesson sits in the last column. The 36-month option costs more each month than the 48-month one, but it saves about ₹23,500 of interest against what you owe now.

Even a good debt consolidation calculator can mislead you if the inputs are off. These are the common slips:

• Stretching the tenure just to see a smaller EMI.

• Leaving a debt out, such as an old BNPL balance.

• Entering the minimum due instead of the actual payment.

• Ignoring the processing fee.

• Comparing a flat rate with an APR.

The last one is the costliest. A "12% flat" loan can be about a 21% APR once the maths is done on the reducing balance. Our guide to debt consolidation companies shows the example.

RBI's Key Facts Statement requirements for applicable retail and MSME term loans include disclosure of the APR, charges and repayment schedule. Charges not disclosed in the KFS generally cannot be levied during the loan term without the borrower's explicit consent. Check the current RBI directions and your lender's documents for the rules applicable to your loan. Use the KFS numbers in the calculator.

Before using any calculator, it helps to know how loan consolidation works and which loans can be included.

A smaller EMI is attractive, but it is not always a good sign. Consolidation may not help in these cases:

1. Total interest goes up. The EMI fell only because the tenure grew.

2. You will keep using the cleared cards. Then you end up with the new loan and fresh card balances.

3. The debts are nearly paid off anyway. A new loan resets the clock.

There is a fourth case. If the calculator tells you your current payment doesn't cover the interest, the issue is your income against your EMIs, not the interest rate. A cheaper loan will not fix that on its own.

Weigh the pros and cons in our guide: is debt consolidation worth it.

1. Check your credit report so every debt is on your list.

2. Get two or three offers and compare the APRs from each Key Facts Statement.

3. Re-run the debt consolidation calculator with the real offer numbers.

4. Close the old accounts properly, and keep the closure letters.

Each lender sets its own minimum score. FREED's Loan Consolidation Plan needs 700 or above.

Keep in mind that the calculator is an estimate. Only the lender's Key Facts Statement gives the final figures. For the application steps, read how to apply for debt consolidation.

If the calculator shows that one loan could help, FREED's Loan Consolidation Plan is the next step. If you qualify, FREED may connect you with a lending partner for a consolidation loan covering eligible unsecured debts. Review the lender's offer and confirm which balances will be repaid, the fees involved and the resulting EMI before proceeding.

You need a CIBIL score of 700 or above. FREED charges the customer nothing. Any lender fees show in the lender's Key Facts Statement.

The EMI Score is a good first check. It gives a 0 to 100 read on how stretched your EMIs are.