Personal Loan & Debt Consolidation Calculator

Credit cards feature revolving compounding interest at average rates between 22% and 28% APR. By consolidating that balance into a fixed personal loan at 8% to 14% APR, you immediately cut interest costs by more than half and establish a strict fixed payoff timeline (e.g. 36 or 60 months).

An origination fee is an upfront processing fee (typically 1% to 8% of the loan amount) charged by the lender and subtracted directly from your loan proceeds. For instance, on a $10,000 loan with a 5% origination fee, you receive $9,500 in your bank account but must repay the full $10,000 principal plus interest.

Initially, applying creates a hard inquiry causing a temporary 3 to 5 point dip. However, using the loan proceeds to pay off credit card balances drastically reduces your credit utilization ratio (which accounts for 30% of your FICO score), often resulting in a substantial net credit score increase within 30 to 60 days.

Most reputable personal loan lenders (such as SoFi, Marcus, Discover, or LightStream) charge zero prepayment penalties, allowing you to make extra principal payments or pay off the entire balance early to eliminate remaining interest.

An unsecured loan is backed solely by your creditworthiness without collateral. A secured loan requires pledging an asset (such as a vehicle title or savings account), which offers lower rates for poor credit but risks repossession if you default.