About the Blended Interest Rate Calculator
This blended interest rate calculator finds the single weighted average rate you are paying across several debts. A simple average of rates is misleading — a 25% card with a small balance matters less than a 6% car loan with a large one — so each rate is weighted by its balance.
Enter each debt on its own line as “name, balance, rate”, for example “Credit card, 6500, 24.99”. The tool returns the blended rate, total balance, and how much interest the debts cost per month and per year right now. It also compares that with a single consolidation loan rate, so you can see whether consolidating would really save money.
It is handy when evaluating a debt consolidation or personal loan offer, a cash-out refinance, or combining a first and second mortgage. The blended rate reflects today’s balances only; it does not account for fees, different remaining terms or promotional rates that will change. Rates are treated as simple annual rates (APR), so monthly compounding on cards is not included.
With the default inputs, the blended interest rate is 8.86%. Change any value above to recalculate instantly.
How to use the blended interest rate calculator
- 1List each debt on its own line as name, balance, rate.
- 2Use the current balance and the APR from each statement.
- 3Enter a consolidation or refinance rate you have been offered.
- 4Read the blended rate and yearly interest cost.
- 5Check whether the consolidation rate beats your blend before applying.
Formula and method
Each debt’s rate is multiplied by its balance, those products are added up, and the sum is divided by the total balance. The result is the balance-weighted average rate — the single rate that would produce the same yearly interest on the combined balance.
Yearly interest is Σ Bᵢ × rᵢ, and monthly interest is one-twelfth of that. Consolidation savings compare that figure with the total balance multiplied by the consolidation rate. This is a snapshot of the current cost; it ignores loan fees and the fact that balances fall at different speeds over time.
- Bᵢ
- Current balance of debt i
- rᵢ
- Annual interest rate of debt i
Worked examples
Card, car, student and personal loans
Interest is 6,500 × 24.99% + 18,000 × 6.9% + 27,000 × 5.5% + 8,000 × 11.5% = $5,271.35 a year on $59,500, a blended rate of 8.86%. A 9.5% consolidation loan would cost $381 more a year, because the big low-rate loans pull the blend below 9.5%.
Two loans with very different sizes
The simple average of 20% and 5% is 12.5%, but the $30,000 loan carries three times the weight: (10,000 × 20% + 30,000 × 5%) ÷ 40,000 = 8.75%. That is the real average cost of the $3,500 in yearly interest.
Three credit cards vs a 12% personal loan
The cards cost $1,662.83 a year on $8,500, a blended 19.56% even with one card at 0%. Moving everything to a 12% personal loan would cost $1,020 a year, saving about $643 — before any origination fee.
Balances typed with thousands separators
Because the fields are separated by a comma and a space, “$245,000” is read as 245,000 rather than being split. Interest is 245,000 × 6.25% + 32,500 × 8.75% + 21,400.50 × 5.9% = $19,418.88 a year on $298,900.50, a blended 6.50%. Moving everything to 7% would cost about $1,504 more a year, so the mortgage is better left alone.
Frequently asked questions
What is a blended interest rate?+
It is the weighted average interest rate across several debts, where each rate is weighted by its balance. It tells you the single rate that costs the same total interest as all your debts combined right now.
How do I calculate a weighted average interest rate?+
Multiply each balance by its interest rate, add those results together, and divide by the total of all balances. For example, $10,000 at 20% and $30,000 at 5% gives (2,000 + 1,500) ÷ 40,000 = 8.75%.
Is debt consolidation worth it if the rate is lower than my blended rate?+
It can be, but also check origination fees, the new loan term and whether you will run balances back up. A lower rate over a much longer term can still cost more total interest than paying the original debts faster.
Why not just average the interest rates?+
A simple average treats a $500 balance the same as a $50,000 balance. Weighting by balance reflects where your interest actually comes from, which is what matters when you compare consolidation offers.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.