# Blended Rate Calculator

Calculate the blended interest rate across multiple loans. Find your weighted average rate and total interest cost. Free blended rate calculator.

## What this calculates

Calculate the weighted average interest rate across multiple loans. Enter the balance and rate for each loan to see your blended rate, total balance, and combined interest cost. Useful for student loans, mortgages, and debt consolidation decisions.

## Inputs

- **Loan 1 Balance** ($) — min 0 — Outstanding balance on your first loan.
- **Loan 1 Interest Rate** (%) — min 0, max 30 — Annual interest rate on loan 1.
- **Loan 2 Balance** ($) — min 0 — Outstanding balance on your second loan.
- **Loan 2 Interest Rate** (%) — min 0, max 30 — Annual interest rate on loan 2.
- **Loan 3 Balance (Optional)** ($) — min 0 — Outstanding balance on an optional third loan.
- **Loan 3 Interest Rate** (%) — min 0, max 30 — Annual interest rate on loan 3.

## Outputs

- **Blended Interest Rate** — formatted as percentage — The weighted average interest rate across all loans.
- **Total Loan Balance** — formatted as currency — Combined outstanding balance of all loans.
- **Total Annual Interest** — formatted as currency — Total interest paid across all loans per year.
- **Monthly Interest Cost** — formatted as currency — Total interest across all loans per month.

## Details

Your blended rate is the weighted average interest rate across all your loans. It tells you the single rate that represents your total debt cost. The formula is: Blended Rate = Sum of (Each Loan Balance x Its Rate) / Total Balance.

For example, a $25,000 loan at 4.5% and a $15,000 loan at 6.8% gives a blended rate of ($25,000 x 4.5% + $15,000 x 6.8%) / $40,000 = 5.36%. The larger loan carries more weight in the calculation because it represents more of your total debt.

Knowing your blended rate is especially useful when considering debt consolidation or refinancing. If a consolidation loan offers a rate below your blended rate, you save money. If the offered rate is above your blended rate, consolidation actually costs you more in interest even though it simplifies payments.

Student loan borrowers often have multiple federal and private loans at different rates. Calculating the blended rate helps you compare refinancing offers. Keep in mind that refinancing federal student loans into a private loan means losing access to income-driven repayment and loan forgiveness programs, so the rate comparison is only part of the decision.

## Frequently Asked Questions

**Q: How do you calculate a blended interest rate?**

A: Multiply each loan balance by its interest rate, add those products together, then divide by the total balance. For two loans: ($10,000 x 5% + $20,000 x 8%) / $30,000 = ($500 + $1,600) / $30,000 = 7.0% blended rate. The larger loan has more weight, so the blended rate is closer to the larger loan's rate.

**Q: When should I use a blended rate?**

A: Use the blended rate when comparing refinancing or consolidation offers. If a new loan offers a rate below your blended rate, refinancing saves money on interest. It is also useful for budgeting since one number is easier to work with than tracking multiple rates. Financial planners commonly use it to assess the overall cost of a client's debt portfolio.

**Q: Is blended rate the same as APR?**

A: Not exactly. The blended rate is a weighted average of multiple interest rates. APR (Annual Percentage Rate) for a single loan includes the interest rate plus fees and closing costs expressed as an annualized rate. When comparing a consolidation loan offer, compare its APR (which includes fees) against your blended rate to get the most accurate comparison.

**Q: Does the blended rate change over time?**

A: Yes, if any of your loans have variable rates, or as you pay down balances unevenly. If you aggressively pay off the highest-rate loan first (avalanche method), your blended rate drops faster. If you pay the smallest loan first (snowball method), the blended rate may not change as quickly. Recalculate periodically to track your progress.

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Source: https://vastcalc.com/calculators/finance/blended-rate
Category: Finance
Last updated: 2026-04-08