The amount a person can save with a debt consolidation loan varies widely, depending on the amount of existing debt in question and the extent to which the consolidating loan terms are economically favorable to the aggregation of his or hers existing loans. Key factors underpinning this determination include interest rates, loan fees and maturity terms.

Debt consolidation makes the most sense when you can achieve a lower interest rate on the consolidation loan than the weighted average rate charged on existing loans. It is even more worthwhile when you can structure a loan term that is shorter than or equal to the weighted average length of your existing debt arrangements.

Depending on your situation, a sensible debt consolidation could save you hundreds or thousands of dollars. For highly indebted individuals, the savings could reach tens of thousands or hundreds of thousands of dollars.