December 2022
View Details
View Details
View Details
View Details
View Details
View Details
View Details
View Details
View Details
Disclosures: SoFi | Earnest | NaviRefi | ELFI | Splash Financial | Citizens | Laurel Road | LendKey | ISL
This weighted average interest calculator is easy to use. This weighted average interest rate calculator automatically calculates the weighted average interest rate on your student loans. The weighted average interest rate is the interest rate used for federal student loan consolidation and is also your effective interest rate for your student loans. Here’s how the weighted average interest calculator works:
To calculate weighted average interest rate with this weighted average interest rate calculator, all you need is your student loan balance and interest rate for each student loan. The weighted average interest calculator then calculates the weighted average interest rate for you.
Let’s use an example. Let’s assume that you have three loans:
So, how do we calculate the weighted average interest rate of these three loans? Here is how:
Your weighted average interest rate is used in several ways.
First, your weighted average interest rate can tell you how much interest you are paying overall for your loans. Rather than have to calculate each individual loan, the weighted average interest rate can tell you quickly what your effective interest rate is and how much your loans will cost you.
Second, your weighted average interest rate is used for a Direct Consolidation Loan when you consolidate student loans.
As this weighted average interest calculator shows, your weighted average rate, rounded to the nearest 1/8%, is your new interest rate with a Direct Consolidation Loan.
Average interest rate is simply the average of your interest rates. This means you simply add your interest rates together and divide by the number of interest rates. The problem is the average interest rate is not reflective of how much interest you are actually paying. That’s why you need a weighted average interest rate calculator. When you calculate average interest rate over time, you will see that the weighted average interest rate is the more accurate calculation. This is because weighted average interest rate accounts for the relative size of each of your loans and assigns more “weight” to the interest rates with higher loan balances. Therefore, the weighted average interest rate is the more precise calculation of your effective interest rate. This is why this weighted average interest calculator is useful.
Student loan consolidation enables you to combine your existing federal student loans into a single, Direct Consolidation Loan. You can analyze the difference between student loan consolidation and student loan refinancing with a student loan consolidation calculator. Unfortunately, private student loans cannot be consolidated into a Direct Consolidation Loan.
If you want to calculate the average interest rate on multiple loans, then this weighted average interest rate calculator will supply the answer. This is because the weighted average interest rate considers the interest rate on each of your loans, and then weights them by the size of the loan. Therefore, a weighted average of your loans is the effective interest rate that you are paying on your loans.
You can enter multiple loans in this weighted average interest rate calculator and determine automatically what is your weighted average interest rate.