# What is my blended rate?

Works out the blended interest rate of several loans, the average of their rates weighted by balance, with the total yearly interest and the rate rounded up to 1/8% as for a federal consolidation loan.

- Page: https://www.acalculator.org/finance/blended-rate-calculator
- JSON spec: https://www.acalculator.org/finance/blended-rate-calculator.json
- Version: dde52c1fcf75

## Default answer

Example with the default inputs (Loans [Balance $200,000.00, Interest rate 3%; Balance $50,000.00, Interest rate 7%]): Your blended rate is 3.8% on $250,000.00.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| loans | Loans | Each loan’s balance and its yearly interest rate, 2 to 20 loans. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| blended | Blended rate | Σ(balance × rate) ÷ Σ balance: the yearly rate that gives the same interest on the total. |
| total | Total balance | All the balances added up. |
| interest | Interest in a year | Σ(balance × rate ÷ 100): one year of simple interest on today’s balances. |
| monthly | Interest in a month | The yearly interest ÷ 12. |
| rounded | Rounded up to 1/8% | The blended rate rounded up to the next 0.125%, as for a federal Direct Consolidation Loan. |
| simple | Plain average of the rates | The rates added up ÷ the number of loans, without weights, for comparison. |

## Method

blended rate = Σ(balance × rate) ÷ Σ balance; yearly interest = Σ(balance × rate ÷ 100); rounded = ⌈blended × 8⌉ ÷ 8.

## Assumptions

- Each balance is weighted by what you owe now; payments and different terms are not modelled.
- Interest in a year and a month is simple interest on today’s balances, before any payment.
- Typed amounts and rates are read exactly, so a shown rate rounds half up from its true value.
- The 1/8% rounding is the federal Direct Consolidation Loan rule; private lenders set their own rates.

## Worked examples

1. loans = {"balance":200000,"rate":3} or {"balance":50000,"rate":7} gives blended = 3.8%, total = $250,000.00, interest = $9,500.00, rounded = 3.875%, simple = 5%. Source: Rounded up to 1/8%: Federal Student Aid, Student Loan Consolidation (the fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent), https://studentaid.gov/manage-loans/consolidation (retrieved 2026-10-02).
2. loans = {"balance":5500,"rate":5.5} or {"balance":7500,"rate":6.53} gives blended = 5.887188%, rounded = 6%, interest = $941.95. Source: Federal Student Aid, Student Loan Consolidation (the fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent), https://studentaid.gov/manage-loans/consolidation (retrieved 2026-10-02).
3. loans = {"balance":10000,"rate":4.5} or undefined gives blended = 4.5%, rounded = 4.5%, monthly = $37.50. Source: Federal Student Aid, Student Loan Consolidation (the fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent), https://studentaid.gov/manage-loans/consolidation (retrieved 2026-10-02).

## FAQ

### What is a blended rate?

A blended rate is the average interest rate of several debts, weighted by how much you owe on each. A big loan at a low rate pulls the blend down more than a small loan at a high rate. It is the single rate that would charge the same interest on your total balance.

### How do I calculate a blended interest rate?

Multiply each balance by its rate, add the results, and divide by the total balance. For $200,000 at 3% and $50,000 at 7%: (200,000 × 3 + 50,000 × 7) ÷ 250,000 = 950,000 ÷ 250,000 = 3.8%.

### Why not just average the rates?

A plain average treats every loan as the same size. In the example above the plain average of 3% and 7% is 5%, but the interest you pay in a year is $9,500, which is 3.8% of $250,000. The calculator shows both so you can see the difference.

### How is a federal consolidation loan rate set?

Federal Student Aid sets a Direct Consolidation Loan’s fixed rate at the weighted average of the rates on the loans you consolidate, rounded up to the nearest one-eighth of one percent. A blend of 5.8871875% becomes 6%.

### Does the blended rate tell me if consolidating saves money?

Not by itself. Consolidating at the blended rate charges the same interest in the first year, but a longer term or the rounding up can raise the total you pay. Compare the total interest over each plan’s full term.

## Sources

- Federal Student Aid, Student Loan Consolidation (a Direct Consolidation Loan’s fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent). https://studentaid.gov/manage-loans/consolidation (retrieved 2026-10-02)