Business debt consolidation calculator

What this calculator does

If your company is juggling several debts — a term loan, a card balance, an overdraft, asset finance — consolidation rolls them into one new facility with a single monthly payment. This calculator shows whether that move genuinely saves money or simply spreads the same cost over a longer period.

Enter each existing debt's balance, rate and remaining term, then the rate and term of the proposed consolidation loan. The tool calculates your current combined monthly payment and total remaining cost, then compares them against the single new facility. You see the change in monthly outgoing, the change in total interest paid, and whether the deal is a true saving or a cash-flow trade. It is the same logic a lender applies when assessing a refinance request, made transparent for you.

How to use it

List your debts honestly — the calculator is only as good as the inputs.

• For each existing debt — outstanding balance, interest rate and months remaining.
• For the new facility — the rate offered and the term over which you would repay.

The result splits into two questions. First, does the new monthly payment fall? Second, does the total amount repaid over the life of the new loan fall? These often pull in opposite directions: a longer term lowers the monthly figure but can raise total interest. Read both numbers before deciding, and use our affordability calculator to confirm the new payment fits your cash flow.

The formula in plain English

The calculator works out a standard amortising payment for each debt and for the new loan, using the rate and remaining term you enter.

Current position = the sum of each debt's monthly payment, and the sum of (each payment × its remaining months) for total cost.

New position = a single monthly payment on the combined balance at the new rate, plus total cost over the new term.

Monthly saving = current combined payment − new payment. Total saving = current total cost − new total cost. A positive monthly saving with a negative total saving is the classic warning sign: lower payments now, more interest overall.

Worked example

A company holds three debts (illustrative figures, not Credicorp rates).

Debt	Balance	Rate	Months left
Term loan	£18,000	11%	24
Card balance	£6,000	22%	18
Overdraft	£4,000	15%	12

Combined, that is roughly £1,420 a month. Consolidating £28,000 at 12% over 30 months gives a single payment near £1,090 — about £330 a month freed up. But over 30 months the total repaid is a little higher than finishing the existing debts on their current schedules. The card debt was the real drag; clearing it at 22% is the win, while the longer term is the price you pay for the lower monthly figure.

How to read the result, and its limits

Treat the monthly saving as cash-flow relief and the total saving as the true economic test. Consolidating is clearly worthwhile when it lowers both, or when it cuts the monthly payment enough to stabilise the business and the extra total cost is modest and deliberate. It is worth pausing when total cost rises sharply just to shave the monthly figure.

The tool does not model early-settlement charges on existing debts, arrangement fees on the new facility, or secured-versus-unsecured differences — all of which affect the real outcome. It assumes you can consolidate the full balance at the quoted rate. Build a repayment plan around the result with our debt reduction plan template. For a regulated consumer debt this calculator is not appropriate; it is built for business borrowing and is educational, not financial advice.