Student Loan Consolidation Interest Rate

Calculating the Weighted Average Interest Rate

Follow the example below to calculate the weighted average interest rate for a federal student loan consolidation.

Step 1

Multiply each loan by its interest rate to obtain the per loan weight factor.

$20,000 * 6.543% = 1308.6
$10,000 * 7.943% = 794.3

Step 2

Add the per loan weight factors together.

1308.6 + 794.3 = 2102.9

Step 3

Add the loan amounts together.

$20,000 + $10,000 = $30,000

Step 4

Divide the total per loan weight factor by the total loan amount and then multiply by 100. This will give you the actual interest rate.

2102.9 / $30,000 = 7.0097%

Step 5

Then round to the next nearest 1/8%.

7.0097% to the nearest 1/8% = 7.01%

Your estimated consolidation interest rate would then be 7.01%.