The Consolidation Math: Three Cards at 26% vs. One Loan at 14.5%
$15,000 across three cards, averaging 26% APR. Here's what it costs on the minimums, what it costs with discipline, and what a 48-month loan does to both.
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Key takeaways
- Minimums on $15,000 at 26% take about 29 years and $31,344 in interest.
- A fixed $420/month on the cards: 70 months and $14,125 in interest.
- A 48-month loan at 14.5%: $413.67/month, $4,856 in interest — $9,269 less, 22 months sooner.
Path A: pay the minimums
Minimum payments on $15,000 at 26% start near $475 and shrink every month, which is exactly the problem. Payoff takes about 29 years and $31,344 in interest. Nobody plans this; it's what happens by default.
Path B: pay a fixed $420 on the cards
Commit to $420 a month and never let it drop. Payoff: 70 months, $14,125 in interest. Better, but you're still paying 26% the whole way.
Path C: 48-month consolidation loan at 14.5%
$413.67/mo · $4,856 interest · done in 48 months
Versus $14,125 in interest and 70 months at $420 on the cards. Same cash out the door each month; $9,269 less interest and 22 months sooner.
Why the gap is bigger than the rate difference suggests
Dropping from 26% to 14.5% is an 11.5-point cut, but the savings compound: every dollar of interest you don't pay is a dollar that reduces principal, which reduces next month's interest. On a multi-year balance that feedback loop is most of the savings.
Run your own
You need three inputs: total balance, blended APR, and the loan APR you actually prequalify for. If the loan is within three points of your cards, the fees and the hassle probably eat the benefit. If it's five or more, the math above is yours.
The compounding insight
Every dollar of interest you don't pay reduces next month's interest.
