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High-Interest Debt Consolidation Calculator

A 0% intro-APR balance-transfer card vs. a 401(k) loan — which actually costs less?

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mo
pts

Option 1 — 0% APR balance-transfer card

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Option 2 — 401(k) loan

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The 401(k) loan available doesn't cover the full balance — you'd need to combine it with another source of funds.

Option 1 — Balance-transfer card

Monthly payment
Transfer fee
Total interest
Total paid
Credit-score impact− pts (est.)

Option 2 — 401(k) loan

Monthly payment
Origination fee
Total interest (paid to yourself)
Total paid
Repayment period
is the lower-cost option by about under these assumptions — but the card carries a credit-score hit and the 401(k) loan carries job-change and lost-growth risk. See the notes below.

Illustrative estimates only, not financial advice. 401(k) loan terms, balance-transfer offers and credit-score effects vary by plan, issuer and individual credit profile.

What is the High-Interest Debt Consolidation Calculator?

This calculator compares two common ways to escape a high-APR credit-card balance: transferring it to a new card with a 0% introductory APR for a limited promotional window, or borrowing against a 401(k) to pay it off in one shot. It lines up the total cost, fees, and payoff timeline for both so you can see which one is actually cheaper for your numbers — not just which one feels simpler.

How does the underlying math work?

For the balance-transfer card, the calculator adds the one-time transfer fee to the balance, then simulates equal monthly payments across your chosen payoff period. If that period is within the 0% promo window, no interest accrues at all; any months beyond the promo window accrue interest at your current card's APR, since most issuers send an unpaid transferred balance back to a standard rate. For the 401(k) loan, it uses the standard installment-loan formula — the same one behind the site's Auto Loan Calculator — to amortize the loan amount over your chosen term at the rate your plan charges, then adds a one-time origination fee.

Real-world practical application

People facing a large card balance use this to decide between two options that feel similar ("borrow to pay off debt") but carry very different risks: a 0% card risks a go-to APR if the balance isn't cleared in time and dings your credit score with a new account, while a 401(k) loan avoids a credit check entirely but must usually be repaid in full within 60–90 days of leaving your job or it becomes a taxable, penalized distribution. Running both scenarios side by side turns an emotional decision into a numbers-first one.

Frequently Asked Questions

Will opening a balance-transfer card hurt my credit score?

A new account and credit inquiry typically dock a score by roughly 10–20 points in the short term, mostly from the hard inquiry and a lower average account age. Scores usually recover within several months as you make on-time payments and the balance drops.

What happens if I don't pay off the card before the 0% period ends?

Any balance left when the promotional window expires starts accruing interest at the card's regular go-to APR, which is often as high as the debt you were trying to escape. Set the payoff period at or below the promo length to avoid this.

Is a 401(k) loan risk-free since I'm borrowing from myself?

No. The money stops growing tax-deferred while it's out, and most plans require the full balance to be repaid quickly if you leave or lose your job — often within 60–90 days. An unpaid balance is then treated as a taxable distribution, plus a 10% early-withdrawal penalty if you're under 59½.

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