Blended Interest Rate Calculator

How it works

When you carry several debts at different rates, no single number on any statement tells you what your borrowing actually costs. The honest summary is your blended rate, also called the weighted average APR: the one rate that would generate exactly the same interest as your whole pile does today. It is not the average of the rates you pay. It is the average weighted by how much you owe at each one, because a rate only matters in proportion to the balance sitting underneath it:

• B_k — the balance on each debt
• R_k — the APR charged on that balance
• Σ — add the result up across every debt you owe

Work the defaults through and it clicks. The $6,000 card at 22.9% generates $1,374 of interest a year, the $2,500 card at 18.5% adds $462.50, the $9,000 personal loan at 11.4% adds $1,026, and the $1,200 store card at 26.9% adds $322.80. Together that is about $3,185 a year on $18,700 of debt. Divide one by the other and your blended rate is 17.0%, roughly $265 a month. The simple average of those same four rates is 19.9%, nearly three points higher, and it describes nobody’s debt.

✓ Every result is checked against independent reference math. See how we test the calculators →

A worked example: four debts, one honest rate

Say you are carrying four balances: a $6,000 card at 22.9%, a $2,500 card at 18.5%, a $9,000 personal loan at 11.4%, and a $1,200 store card at 26.9%. That is $18,700 of debt, and the calculator puts your blended rate at 17.0%, which costs about $265 a month in interest.

The number worth staring at is the one sitting next to it. The simple average of those same four rates is 19.9%, almost three points higher than the truth. The gap opens up because the personal loan is 48% of everything you owe, so its cheap 11.4% carries nearly half the weight, while the 26.9% store card is only about 6% of the balance and barely registers. Your worst rate is the one you complain about; it is not the one you are paying.

Now clear that personal loan and set its balance to 0. Nothing else changes, yet the blend leaps to 22.3% on the $9,700 of card debt still standing, and the monthly interest drops to $180. You are unambiguously better off with less debt, but what remains is expensive, and a 19% consolidation offer that would have cost you money last month now saves it. Enter your own balances and rates above to find the number any offer has to beat.

Why it is not the average of your rates

Averaging four rates treats a $1,200 store card as the equal of a $9,000 loan, and your lenders certainly do not. Weighting fixes that by giving every debt a vote sized to its share of the balance.

• The personal loan owns the result. At $9,000 it is 48% of everything you owe, so its friendly 11.4% gets nearly half the say and drags the blend down hard.
• The store card barely registers. A 26.9% rate looks alarming, but $1,200 is only about 6% of the total, so the worst rate in the list moves the blend by a fraction of a point.
• The two agree only when balances match. Identical balances make the weighted and simple averages the same number. The further apart your balances spread, the further apart the two figures drift.

That is why the simple average is worse than useless here. It can be off by several points, and it is wrong in whichever direction your money actually sits. Read the gap the breakdown shows you: when the simple average overstates your blend, your debt is cheaper than it feels, and any offer to refinance it has a lower bar to clear than you assumed.

The number a consolidation offer has to beat

This is the whole reason to work the blend out. A consolidation loan or a balance transfer replaces your mix with one rate, so the test is refreshingly binary: your blended rate is the bar, and an offer either clears it or it does not.

• Below your blend, you save. At the defaults, anything under 17.0% cuts your interest bill. A 12% loan would take the monthly interest from about $265 down to roughly $187.
• Above your blend, you are paying for tidiness. A 19% offer looks like a rescue next to a 26.9% store card, but it is worse than the debt you already have. One payment instead of four is a real convenience; just know what it costs.
• Hold the term still. A lower rate stretched over more months can still cost more in total. Compare over the payoff window you would have hit anyway, or the saving is an illusion.

Once you have your blend, our Debt Consolidation Savings Calculator is the natural next step, since it takes your current rate and an offer’s rate and prices the difference in dollars across the term. Fees belong in that comparison too, because an origination charge or a transfer fee can swallow a thin margin whole.

What actually moves your blend

Watch this number as you pay debts down and it behaves in a way that catches people off guard. Clearing cheap debt pushes it up. Clearing expensive debt pulls it down. Neither is good or bad news by itself, because the blend describes what is left, not how well you are doing.

• Retiring the personal loan raises it. Clear the $9,000 at 11.4% and the blend leaps to 22.3% on the $9,700 of card debt still standing. You are better off and your rate is worse, and both of those are true at once.
• Killing the store card barely touches it. That 26.9% balance is small, so paying it off is a quick win for your utilization and your nerves, but the blend hardly notices it leave.
• A rate change on your biggest debt matters most. Variable card rates drift, and a card holding half your balance drags the blend along with it. Recheck after any rate move on the big one.

One thing the blend will not do is pick your payoff order. The avalanche method still says attack the highest rate first whatever its size, because that is what saves the most interest. Your blend is a summary of the pile, not a strategy for dismantling it.