With the default inputs (Loan #1 Balance $35,000; Loan #1 Interest Rate 7%; Loan #2 Balance $15,000; Loan #2 Interest Rate 6.5%; Loan Term 0), this calculator returns Weighted Average Interest Rate 6.85%, Total Loan Balance $50,000.00 and Savings Before and After Consolidation Calculation requires more details.
To use this calculator, enter the balance and interest rate for each loan you have. You can add more loans if needed. The calculator will automatically compute the weighted average interest rate and display the total loan balance.
The formula used is: Weighted Average Interest Rate = (Sum of (Loan Balance * Interest Rate)) / Total Loan Balance
Suppose you have two loans: one with a balance of $35,000 at 7% interest, and another with a balance of $15,000 at 6.5% interest. The weighted average interest rate would be calculated as follows:
When using this calculator, remember that it assumes all loans are of the same term. For more accurate savings calculations, additional details about each loan's term and payment structure may be needed. This tool is best used for quick estimates and planning purposes.