When you’re looking to consolidate your debt, you may find that it’s hard to figure out just how much debt you have. That’s without even thinking about how long it will take to pay down at your current monthly payment, how much interest you’re paying overall, and other complex details of your credit.
They’re Easy To Use
All you need is just the basic information about all of your current lines of credit: credit cards, auto loans, student loans, and any other outstanding debts. Most calculators ask you for:
- your current balance (or amount owed)
- your current monthly payment
- your interest rate
To put together a clear picture of your current financial standing, you need to include the information for each one of the accounts to get the total. Some may also ask for information about the loan you’re considering, such as the number of years you will take to pay it off and its interest rate so that the calculator can compare your current debt to your potential debt.
They’re Multipurpose
You can use a good loan consolidation calculator not only to look at a consolidation loan, but also just to understand how much debt you’re in. You can use them for your student loans, your credit cards, your payday loans, and more.
There are even different loan consolidation calculators you can find that fit your needs specifically. For example, if you’re looking for student loan consolidation, you can find a calculator that takes into account whether the loan is subsidized or unsubsidized.
You Need One
Technically, you don’t have to have one. You can do the math yourself, too! That said, we don’t recommend it. For other matters, it’s totally fine to hash it out with pen and paper, but loan consolidation gets messy. A loan consolidation calculator takes all of your information at once, but if you’re doing it by hand, you’d need to take into account your monthly payments vs. your total debt to see how long it will take you to pay it off, and then include your interest rate and any other terms of your credit.
A loan consolidation calculator is an important tool because it shows you whether or not a consolidation loan will actually save you money in the long run, or whether it could end up costing you money. If you’re already in debt, the last thing you want to do is end up in more debt!
