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Consolidation
Calculator
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Getting a consolidation loan can do more
than payoff your debt. You can create a
sizeable nest egg by investing all or a
portion of your monthly payment savings.
After a few years the results may surprise
you! Use this calculator to see the
results of paying off your debt and
investing your payment savings.
Definitions
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Credit cards
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Enter one total credit card debt and
its average interest rate, or press
the "Details" button to enter up to
10 credit card accounts, one on each
line.
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Car loans
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Click on the "Details" button to
enter any car loans you may have.
The details page is designed to let
you enter your current monthly
payment, the term (in months), the
starting balance and the number of
months you have left. It then
calculates your outstanding balance
and interest rate. You can enter up
to three loans.
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Other loans
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Click on the "Details" button to
enter any other loans you may have
in the details page. This page is
designed to let you enter your
current monthly payment, the term
(in months), the starting balance
and the number of months you have
left. It then calculates your
outstanding balance and interest
rate. You can enter up to six loans.
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Balances
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Your total current balances for your
credit cards, car loans and
investment loans.
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Interest rates
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The average annual percentage rate
you pay. This interest rate is
calculated for each of the
categories of debt you have
including credit cards, car loans
and other installment loans. For
credit cards, the rate you enter is
used to calculate the interest on
all future credit card payments. The
length of time to pay off this
credit card may be much greater than
calculated if you enter a low
promotional interest rate that is
only good for a short period of
time.
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Payment
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This is your initial monthly
payment. For credit cards, if you
checked the "use credit card minimum
payments" box on the details page,
your monthly payment is calculated
as 2% of your current outstanding
balance. With the "use credit card
minimum payments" box checked, your
monthly payment will decrease as
your balance is paid down. This can
greatly increase the length of time
it takes to pay off your credit
cards. Uncheck this box to enter
your own monthly payment that will
remain the same until your balance
is paid in full.
(We calculate your minimum
monthly payment as 2% of your
current outstanding balance. While
your actual minimum monthly payment
may be slightly different, say 3%,
this is one of the most common
methods used by credit card
companies to calculate minimum
payments.)
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Loan balance
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This is the total loan amount you
are planning on receiving. This
amount must be at least equal to
your total outstanding debt plus any
fees. If you choose to receive a
larger loan amount than your
outstanding debt, plus any fees, the
additional amount is added to the
starting balance of your investment.
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Loan term
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The length of time you will repay
this loan. The investment timeframe
for this calculator also uses the
loan term. This can be from one to
30 years.
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Loan interest rate
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The annual interest rate you are
charged for this loan. This
calculator assumes that your
payments are made monthly and that
interest is compounded monthly.
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Percent to invest
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This is the percentage of your
monthly payment savings you wish to
invest. Any remaining payment
savings is used to repay your loan.
For example, if you have a monthly
payment savings of $100 and choose
to invest 75%, $75 would be invested
and $25 would be an additional
amount applied to your loan balance.
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Rate of return
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This is the annual rate of return
you expect from your investment. The
actual rate of return is largely
dependent on the type of investments
you select. ASX 300 has returned an
average of 10.64% annually since
inception. Savings accounts at a
bank pay as little as 1% or less. It
is important to remember that future
rates of return can't be predicted
with certainty and that investments
that pay higher rates of return are
subject to higher risk and
volatility. The actual rate of
return on investments can vary
widely over time, especially for
long-term investments. This includes
the potential loss of principal on
your investment.
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Useful
Information