Combine multiple loan balances to find the weighted-average interest rate.
Loan 1
Loan 2
Loan 3 (optional)
Formula: Blended Rate = Σ(Balance × Rate) / Σ(Balance) Weighted average of each loan's rate by its balance
When to Use Blended Rates
Debt consolidation: Compare the blended rate of current debts to a consolidation loan offer
Mortgage + HELOC: Find your overall housing debt rate
Student loans: Calculate the weighted rate across multiple federal/private loans
Consolidation Rule of Thumb
Only consolidate if the new rate is lower than your blended rate. If your blended rate is 15% and a consolidation loan offers 8%, you'll save money. But if the offer is 12% and your blended rate is 10%, it's a bad deal.