UK Debt Consolidation Calculator 2026/27: Compare APR and Total Cost

A UK debt consolidation calculator helps you compare several existing debts with a proposed single repayment. You can enter each balance, interest rate and minimum payment, then test a consolidation rate, fee and term. The useful question is not simply “Can I lower my monthly payment?” It is “What happens to the total cost, repayment date, flexibility and risk if I replace these debts?”

The Debt Consolidation Simulator is an educational planning tool. It does not approve credit, predict the rate a lender will offer, check your credit file or decide whether borrowing is suitable. MoneyHelper describes consolidation as one possible way to manage multiple credit commitments, but warns that the total amount payable, interest, fees and affordability all need to be checked. This guide explains the calculator inputs, the comparison method and the situations where more borrowing may be the wrong next step.

Key takeaways

What a debt consolidation calculator compares

The calculator creates two planning views. The first is a baseline: what the listed debts would cost if their stated balances, rates and payments continued under the assumptions entered. The second is a proposed consolidation arrangement: one balance, one rate, one term, one payment and any stated fees. The difference is an illustration, not a guaranteed saving.

For each current debt, gather:

For the proposed arrangement, enter the amount required to clear the debts, the offered APR or rate, the repayment term in months, any arrangement or broker fee, and the planned extra payment. Do not add a fee twice. If the lender adds it to the loan, it increases the balance and interest; if it is paid separately, it still belongs in the total-cost comparison.

Step 1: build a complete debt inventory

Start with statements, not memory. List credit cards, store cards, personal loans, overdrafts, car finance, buy-now-pay-later balances and informal borrowing where they affect the household budget. Record the date and amount of the next payment as well as the balance. MoneyHelper recommends adding up what is owed and checking accounts and statements so that a repayment plan does not omit a creditor.

Separate priority household payments from ordinary unsecured credit. Rent or mortgage payments, energy bills, Council Tax or Rates, and other priority obligations can have more serious consequences if missed. They should not be treated as interchangeable with a credit-card balance simply because both appear as monthly outgoings. If a priority payment is at risk, pause the loan comparison and seek debt advice.

Check whether a balance is still in a promotional period. A card at 0% for a limited period may look cheap in the baseline, but the standard rate after the offer ends could materially change the result. Conversely, moving it into a consolidation loan too early could create fees or remove a benefit. Enter a scenario for the current offer ending and another for the proposed loan so you can see the timing risk.

Step 2: calculate the baseline before testing a new loan

Add the balances to find the amount that a new loan would need to cover. Add the minimum payments to see the current monthly commitment. Then check whether the baseline assumes that every payment remains constant until the balance reaches zero. That may not be true for variable-rate borrowing, promotional cards or loans with a different amortisation schedule.

The baseline is still valuable because it establishes a fair comparison. Without it, a new loan can look attractive simply because its payment is displayed prominently. A baseline also lets you test repayment strategies that do not involve more borrowing, such as paying minimums on every account and directing spare money to the highest-cost balance or the smallest balance.

The simulator uses simplified repayment assumptions. Compare its output with current statements and lender settlement figures. If a statement includes daily interest, a final balloon payment, a fee or a changing rate, the calculator cannot infer that detail from a single APR field. Use the statement or the lender’s written figure as the evidence when numbers conflict.

Step 3: enter the proposed APR, term and fees

APR is more useful than a headline interest rate because it is intended to reflect certain costs of borrowing, but it still needs to be read with the product terms. MoneyHelper advises looking beyond the advertised rate and comparing APR for unsecured products or APRC for secured loans where applicable. Record whether the quoted rate is representative, fixed, variable or available only after an eligibility check.

The term is just as important as the rate. Suppose a consolidation loan reduces the payment from £650 to £430 by extending the repayment period. That may improve cash flow, but it could leave the borrower paying interest for several more years. The calculator should therefore show:

• the proposed monthly payment;
• the number of scheduled payments;
• interest under the stated assumptions;
• arrangement, transfer, broker and settlement fees;
• the total amount repayable; and
• the date or month in which the debt is expected to clear.

Run a shorter-term scenario if the payment is affordable, then run a longer-term scenario only to understand the cash-flow trade-off. Do not choose the longest term merely because it returns the lowest monthly number.

Step 4: compare monthly payment and total cost separately

There are two different decisions in a consolidation comparison:

1. Cash-flow decision: can the household make the payment every month without relying on further credit?
2. Cost decision: does the arrangement reduce the realistic total payable after interest and fees?

The answers can differ. A longer loan may pass the cash-flow test while failing the cost test. A short loan may be cheaper overall but unaffordable in a month with an irregular bill. A responsible comparison makes both results visible rather than calling the lowest payment “best”.

For example, a borrower might have three balances totalling £12,000 with combined minimum payments of £420. A new loan could quote a £300 payment over a longer term. That £120 monthly difference is not a saving until the total payable is compared. If the new loan runs for 60 months instead of the existing debts being cleared in 36 months, the borrower may pay more interest even at a lower rate. The example is deliberately illustrative; use your own statements and offer terms.

Include the cost of closing or settling existing accounts. MoneyHelper notes that fees for paying off existing loans early or paying a company to arrange the new loan can wipe out an apparent saving. Ask each lender for a settlement figure and the new lender for the full amount payable before relying on the result.

Step 5: test consolidation against avalanche and snowball plans

Consolidation is not the only comparison. The avalanche method keeps the minimum payment on every debt and directs extra money to the highest APR first. Under stable rates and no special penalties, it often reduces interest compared with paying extra to a lower-rate balance. MoneyHelper similarly says it usually makes sense to pay the highest-rate debt first while maintaining required payments elsewhere.

The snowball method directs extra money to the smallest balance first. It can produce a quick account closure and may be easier to maintain psychologically, even if it is not the lowest-interest route under the stated mathematics. The best plan is one the household can follow consistently without missing minimum payments.

Model both strategies if the tool supports them. Compare the month each debt disappears, the total interest estimate and the monthly flexibility. If an existing lender offers a hardship arrangement or fee freeze, include that as a separate scenario rather than assuming a new loan is the only way to reduce cost.

Step 6: understand unsecured and secured borrowing

An unsecured consolidation loan is not backed by a particular asset, but missed payments still create serious credit and collection consequences. A secured loan uses an asset, often the home, as security. MoneyHelper warns that if payments on a secured consolidation loan are missed, the borrower could lose their home.

Do not compare only the APR. Add the security risk to the decision. Ask whether the proposed loan converts credit-card or personal-loan debt into a charge against the property, whether the term extends into retirement, what happens if income falls, and whether early repayment is restricted. A lower rate can be outweighed by a longer term and a much more serious consequence of default.

If a broker or lender suggests securing debts against a home, get independent advice and read the formal documents. The simulator can show arithmetic; it cannot judge whether the household should put its home at risk.

Step 7: treat DSR as a planning ratio, not a lender rule

The simulator can show a simplified debt-service ratio: required monthly debt payments divided by monthly net income. This is useful for seeing how much income is already committed, but it is not a universal UK approval threshold. Lenders use their own affordability models, definitions, stress tests and evidence. A ratio calculated from incomplete income or missing household costs can be misleading.

Use DSR as a prompt to inspect the budget. Include minimum payments, the proposed consolidation payment, rent or mortgage, utilities, food, travel, childcare, insurance, tax and irregular annual costs. If the ratio falls only because the term is extended, record that trade-off. If the payment is affordable only with overtime or a temporary bonus, run a conservative income scenario.

Step 8: check the provider before applying

The FCA says almost all firms providing financial services in the UK must be authorised or registered, and its Firm Checker can show whether a firm has permission for the services it offers. Check the lender, broker or debt adviser before sharing personal information or paying a fee. Match the legal firm name and contact details, not only a trading brand or advert.

Be cautious of promises to repair a credit score instantly, become debt-free overnight or provide a dramatically lower payment without explaining the term and total cost. MoneyHelper also warns about upfront consultation fees and unrealistic consolidation claims. An authorised firm is not a guarantee that a product is right for you, but checking authorisation reduces the risk of dealing with an unauthorised provider.

When more credit is probably the wrong first step

Do not use a consolidation calculator as a reason to apply for a loan when essential spending already exceeds reliable income. If you have missed payments, are receiving court or bailiff contact, face repossession, or cannot keep up with energy, rent, mortgage or Council Tax, contact a free debt adviser. MoneyHelper says a debt adviser can help identify options that may not be obvious and can help organise contact with creditors.

Applying for more credit can add searches, fees and another account without solving the shortfall. It can also make the situation worse if the old cards remain open and are used again. If you proceed with consolidation, decide in advance how existing accounts will be managed, and do not assume that a cleared balance is a permanent solution if spending still exceeds income.

Practical calculator checklist

Before accepting a result, keep these items together:

• current statements for every debt;
• settlement figures and early-repayment conditions;
• the quoted APR or APRC, term, fees and total amount payable;
• a budget based on reliable income and essential costs;
• a baseline, consolidation, shorter-term and downside-rate scenario;
• the effect of a promotional rate ending;
• whether any debt is secured or a priority payment;
• the provider’s FCA authorisation and exact legal name; and
• the free debt-advice route you will use if the budget does not balance.

Then run the Debt Consolidation Simulator. Save the assumptions beside the output and update them when a lender gives you a formal illustration. The page can help you ask better questions; it cannot replace the contract, statements or personal debt advice.

Frequently Asked Questions

Bottom line

Use a debt consolidation calculator to compare a complete baseline with a complete proposed loan. Enter every balance, rate, minimum payment, fee and term. Look at monthly affordability and total repayment cost separately, then test what happens if the rate rises, the promotional period ends or the term changes.

Consolidation may simplify several payments, but it does not erase debt. It can cost more, extend repayment or turn unsecured borrowing into debt secured against a home. If the household budget is already short, priority bills are at risk or arrears have started, free debt advice should come before a new credit application.

Official sources

• MoneyHelper: Debt consolidation loans — consolidation routes, APR/APRC, fees, secured-borrowing risk and alternatives.
• MoneyHelper: Help if you're struggling with debt — debt inventory, priority payments and free advice.
• MoneyHelper: Managing your money — paying high-cost borrowing first while maintaining minimum payments.
• FCA: How to check a firm or individual is authorised — Firm Checker, permissions and unauthorised-firm warnings.
• FCA: Financial Services Register — the official public record of authorised and previously authorised firms and individuals.

This guide is general educational information for the UK 2026/27 tax year. It is not personal debt, legal or financial advice, a credit offer or a recommendation to consolidate. Check current official guidance, lender terms, statements and free debt advice before acting.