Debt Consolidation Eligibility Tool

Example data table

Example values are illustrative and rounded for readability.

Formula used

How to use this calculator

1. Enter unsecured debts you want to combine into one payment.
2. Add income, housing cost, and other monthly debt payments.
3. Provide your credit score and recent payment history details.
4. Choose a term and optional fee or cash-out amount.
5. Press Check Eligibility to view results above the form.
6. Download CSV or PDF to share, compare, or save records.

Eligibility indicators lenders often review

Most lenders screen for steady income, manageable debt ratios, and acceptable credit history. Applicants with scores above 720 often see lower pricing bands, while scores under 640 may trigger higher-rate offers or manual review. Many programs also expect clean recent performance, such as zero to two 30+ day late payments within twelve months and limited collections activity. Stable employment of 12+ months and verifiable income can improve decision speed. Self-employed applicants may need two years of returns.

Debt-to-income ranges and what they imply

Back-end DTI compares required monthly obligations to gross monthly income. A common comfort zone is 30% to 40%, where repayment capacity looks resilient. Between 40% and 50%, approvals can still happen, but documentation and stability matter more. Above 50%, lenders may reduce the approved amount, shorten the term, or request a co-signer. DTI counts housing, other loans, and the new consolidation payment.

Rate, term, and payment sensitivity

Term length changes the monthly payment sharply. A 25,000 balance at 18% over 48 months is roughly 735 per month, while 72 months is closer to 540, before fees. The payment estimate uses standard amortization and a mid-range APR. If the APR rises by 5 points, the monthly payment can increase meaningfully on larger balances.

Fees and true cost comparison

Origination fees commonly range from 0% to 8% of the amount financed. A 3% fee on a 25,000 balance adds 750 to the financed principal, raising both the payment and interest basis. Compare APR, fees, and term together, then compute total paid over the full schedule rather than focusing only on the monthly payment.

Action steps to improve approval odds

Small changes can move eligibility tiers. Reducing revolving utilization, paying down high-APR cards first, and avoiding new hard inquiries can support score gains over time. Keeping the new DTI below 40% often improves the decision outcome. If flags appear, consider lowering the requested amount, selecting a shorter term, or adding a qualified co-signer.

FAQs

What DTI is considered strong for consolidation?

A new back-end DTI around 30% to 40% is typically strong. Between 40% and 50% may still qualify with solid income and credit. Over 50% often requires reducing the loan amount or adding a co-signer.

Does a higher credit score guarantee approval?

No. A strong score helps pricing, but lenders also review income stability, recent late payments, collections, and overall DTI. Verification issues or high obligations can still lead to a decline or smaller approved amount.

How does an origination fee affect my results?

The fee increases the financed principal. For example, a 3% fee on 25,000 adds 750 to the loan amount, which raises both the monthly payment and the interest basis used for comparisons.

Why can a longer term cost more overall?

Longer terms spread payments over more months, lowering the payment but increasing total interest paid. Even with the same APR, extending from 48 to 72 months can add substantial interest to the full repayment schedule.

What if my income varies month to month?

Use a conservative monthly average based on recent history, such as the last 6 to 12 months. If income is seasonal, test both a typical month and a low month to see how the new DTI and eligibility tier change.

Should I include secured debts like auto loans?

Usually no. Secured loans are priced differently and may have penalties or collateral risks. Consolidation is commonly used for unsecured debts like cards and personal loans. If you include secured debt, compare total costs carefully.