Calculator
Loan Consolidation Calculator
How much you can save by consolidating several loans into one loan secured by a property.
When several loans are open in parallel - a personal loan, revolving credit, a car loan - the total monthly payment is sometimes significantly higher than it could be in a single consolidated loan secured against a property, thanks to the lower interest rate that collateral provides.
Current loans
Loan 1
Loan 2
Consolidated loan terms
Total current payment
₪2,100
Consolidated payment
₪810
Monthly saving
₪1,290
Total payable on the consolidated loan: ₪97,195
This is a general estimate only and does not include file-opening and lien costs. The final loan terms are set by the lender.
How the calculator works
You add a row for each existing loan (balance, rate, monthly payment) - as many as you need - and enter the estimated rate and term of the new consolidated loan. The calculator sums up all the loans and compares the current total payment with the new consolidated payment.
The formula behind the calculation
The new monthly payment is calculated by the Spitzer formula on the total consolidated balance, at the new rate and term. The comparison with the existing payment shows the monthly change.
What the calculator does not include
It does not include file-opening or property lien costs involved in the consolidated loan
It does not calculate the total interest over time - only the monthly payment
It assumes a fixed rate throughout the new term
Why it matters
A lower monthly payment after consolidation can create a misleading sense of saving, when in practice the term has been extended and the total interest over time has risen. The right check also compares the total cost of the consolidation against the existing loans, not only the monthly payment.
Frequently asked questions
Is loan consolidation always worthwhile?
Not necessarily. If the new term is significantly longer than the remaining terms of the existing loans, the monthly payment goes down but the total interest may go up.
What is needed to get a consolidated loan against a property?
Mainly free value in the property - the difference between the property's value and the existing mortgage on it, if any. The higher the free value, the larger the possible financing.
How many loans can be consolidated at once?
There is no limit on the number - you can consolidate as many as you have, as long as the total balance you want to consolidate fits within the financing approved against the property.
Does loan consolidation hurt the credit score?
Closing existing loans and opening a single consolidated loan is normal financial activity. A slight temporary drop in the score may result from opening a new facility, but it is usually balanced quickly with a regular payment history.
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