Say goodbye to confusion with our blended rate calculator! It’s designed to make your life easier by allowing you to input several interest rates effortlessly, and in no time, you’ll receive a single, consolidated rate.

This calculator is a great way to demystify interest rates and guarantee precision. Stick around to learn how to calculate a blended rate, and make sure to try out our calculator for your needs!

Summary

• A blended rate calculator combines multiple interest rates from different loans or debts into a single, simplified rate. This gives you a clear overview of your total borrowing costs, making it easier to manage and compare financial options.
• Our calculator instantly computes your blended rate with precision, removing the hassle of manual calculations. Whether you’re consolidating debt, refinancing, or comparing loan options, this tool helps you make smarter financial decisions, quickly and accurately.
• Before you dive into any big financial decisions like refinancing your mortgage or taking out a second loan, take a good look at how a blended rate will affect you. Grasping this combined rate helps you understand your financial commitments better and allows you to select the most suitable strategy for your needs.

What is Blended Rate Calculator ?

A Blended Rate Calculator is a financial tool used to compute the weighted average interest rate of multiple loans or investments with different rates and principal amounts. It helps individuals or businesses determine the overall cost or return when combining different financial obligations or assets.

And The Blended Rate ?

If you are managing two loans (one is a big one with a low interest rate and the other is smaller but comes with a higher rate), rather than dealing with multiple payments and varying rates, a blended rate pulls them together into a single, weighted average. This gives you a much clearer view of what you’re really paying in total.

Let’s say you’re weighing the idea of refinancing your mortgage with a cash-out option to pay off some debts. It’s totally understandable to be reluctant about losing your current interest rate.

However, if you consider the overall interest rate of all your debts, you might realize that a higher mortgage rate could lead to greater savings when stacked against the costs of other debts, such as credit cards and personal loans.

How to Calculate a Blended Rate ?

The Formula:

Copied!Blended Rate = 
(Balance of Loan A × Interest Rate of Loan A) + (Balance of Loan B × Interest Rate of Loan B)
──────────────────────────────────────────────────────────────────────
               Total Balance of All Loans
Blended Rate = 
(Balance of Loan A × Interest Rate of Loan A) + (Balance of Loan B × Interest Rate of Loan B)
──────────────────────────────────────────────────────────────────────
               Total Balance of All Loans

Practical Example:
Let’s say you have:

• Loan A: $10,000 balance at 4% interest
• Loan B: $5,000 balance at 6% interest

Copied!Blended Rate = ($10,000 × 4%) + ($5,000 × 6%)
              ──────────────────────────────
                  $10,000 + $5,000

            = ($400) + ($300)
              ───────────────
                 $15,000

            = $700/$15,000 = 4.67%
Blended Rate = ($10,000 × 4%) + ($5,000 × 6%)
              ──────────────────────────────
                  $10,000 + $5,000

            = ($400) + ($300)
              ───────────────
                 $15,000

            = $700/$15,000 = 4.67%

The key benefit is that this single blended rate of 4.67% gives you a clearer picture of your combined debt costs than looking at each loan separately – especially useful when consolidating debts or comparing financing options.

Final Notes

Dealing with multiple loans or debts can be quite complicated, but a blended rate simplifies everything. By combining various interest rates into one weighted average, both businesses and individuals can gain a clearer picture of their true borrowing costs, which helps them make smarter financial choices.

Our Blended Rate Calculator takes the hassle out of this process. There is no need for tricky math or guesswork. Jjust input your loan amounts and rates, and you’ll get an accurate blended rate in a flash. It’s quick, precise, and designed to provide clarity, helping you confidently refine your financial strategy.