Blended Rate Calculator
Calculate the weighted interest rate across multiple loans.
Table of Contents
How to Use
- Enter the balance and interest rate for at least two loans you plan to combine.
- Optionally add a third loan balance and rate to capture additional debts.
- Click calculate to view the blended interest rate, total balance, and each loan's share.
- Use the results when evaluating refinance offers or debt consolidation plans.
Why Calculate a Blended Rate?
Lenders often use a blended rate to show the effective interest cost when combining multiple balances into a single loan. It helps you compare offers, evaluate refinance scenarios, and understand the true cost of consolidating debt.
How the Weighted Rate is Calculated
The calculator multiplies each balance by its interest rate, adds the results together, and divides by the total loan balance. The outcome is the weighted or blended interest rate.
- Each balance contributes proportionally based on its size.
- Higher-rate balances have a bigger impact on the blended rate.
- Adding a new balance can raise or lower the overall rate depending on its APR.
Planning Tips
- Compare the blended rate to prospective refinance offers to confirm potential savings.
- Consider paying down the highest-rate balances first to lower the blended rate.
- If consolidating debt, account for origination fees or promotional periods that affect the effective rate.
Frequently Asked Questions
- How many loans can I combine?
- This calculator supports up to three balances. If you have more, group them by similar rates or run the calculator multiple times.
- Is the blended rate the same as a refinance offer?
- Not necessarily. The blended rate is the current weighted cost of your loans. A refinance offer should provide a rate lower than the blended rate to deliver meaningful savings.
- Can I include zero-interest balances?
- Yes. Enter the balance with a 0% rate. It will reduce the blended rate proportionally to its share of the total debt.