To determine if debt consolidation is sensible, calculate the total interest and fees you will pay on the proposed consolidation loan. Then, compare this amount with the aggregated amount of total interest and fees you will pay on your existing debts.

If the expenses associated with the consolidation loan are lower than those you currently face, consolidating your debt is financially beneficial. Additionally, the quantitative benefit can be enhanced by the qualitative gain of reducing your administrative effort (i.e. managing a single debt vs. multiple debts).

If you are uncomfortable with loan-related calculations, ask the firms you are working with to provide the necessary detail. They are legally obligated to provide such information.