Debt Consolidation Loan Calculator

Debt consolidation is one of the tools a consumer has at his disposal to address his adverse financial situation, and a debt consolidation loan calculator is that software program that lets a consumer play out possible debt consolidation scenarios to determine how much money he will save if he chooses to consolidate his debt.

A consumer is a good candidate for debt consolidation if he has a number of credit card – or other – liabilities that could be all be settled with a cash lump sum obtained through either a home refinance loan or a personal loan. After consolidating his debts in such a manner, the consumer will still have to repay the consolidation loan, including the interest on this loan, which should have a lower rate than the initial loans had. It is in this way that the consumer benefits from debt consolidation.

Debt consolidation loan calculators have been developed – and are freely available on many internet financial advice sites – to help consumers determine whether debt consolidation would make financial sense. Specifically, these calculators would, once all relevant information has been entered into them, reveal things like what the consumer’s new monthly payment on the consolidation loan would be and how much he would save should he consolidate his debts. Debt consolidation loan calculators are also extremely easy to complete as all the information needed to achieve the desired result should be at the consumer’s fingertips.

The first thing a consumer should enter into the typical debt consolidation loan calculator is all information concerning the debts he wishes to consolidate. The type of debt, the current balance owing on each debt – this amount can be obtained from the lender if it isn’t mentioned on the statements – the present interest rate (perhaps increase this a little to anticipate future interest hikes), any relevant annual charges and the minimum payments made on each debt will all be required. Also, the debts to be consolidated can include, among other things, credit card debts, student loans, car loans and liens.

The next information the consumer would have to enter into the calculator program is the number of months over which he would like to repay the consolidation loan and whether he would like to pay more than the required monthly minimum. It is here that the consumer can play with different scenarios – how long he wants to take to pay the loan off and how much he wants to pay every month – to determine exactly how the consolidation would affect him financially. As soon as using the debt consolidation loan calculator has allowed the consumer to determine exactly what type of loan would be best for him – as regards to the loan amount, interest rate and desired minimum payment – he can approach a financial institution to request the loan in question.

Given the above, the debt consolidation loan calculator is an extremely powerful tool that serves to make financial planning a whole lot simpler.