Your blended rate is the average of your interest rates, weighted by how much you owe on each debt. It's what your debts cost you as a whole, and it's the number a consolidation offer has to beat.
Why a simple average misleads
Take a credit card at 22% and a car loan at 7%. Their simple average is 14.5%, whatever you owe on each. Across these four splits of $20,000, your real rate runs from 8.5% to 18.25%:
| Card at 22% | Car loan at 7% | Blended rate | Interest per year |
|---|---|---|---|
| $2,000 | $18,000 | 8.5% | $1,700 |
| $5,000 | $15,000 | 10.75% | $2,150 |
| $10,000 | $10,000 | 14.5% | $2,900 |
| $15,000 | $5,000 | 18.25% | $3,650 |
Only the even split lands on the simple average. With $18,000 of the $20,000 on the car loan, the blend is 8.5%, far nearer 7% than 22%.
One rate that charges the same interest
Put simply, it's the one rate that would charge the same yearly interest on your whole balance. In the 8.5% case, $2,000 × 22% + $18,000 × 7% = $1,700, exactly $20,000 × 8.5%.
The calculator's annual interest is that figure at today's balances. Payments shrink it during the year, so use it to compare options, not to forecast.
Which rate to enter for each debt
- Existing loans: the interest rate on your latest statement. Whatever you paid in upfront fees is gone either way.
- Credit cards: the purchase APR on your statement. A promotional balance on the same card counts as a separate debt.
- Promotions: according to the CFPB, the promotional rate on most balance transfers lasts a limited time. Rerun the blend at the rate that follows. The balance transfer calculator works out the transfer fee.
- Variable rates: if a rate can change, your blend is only a snapshot of today.
Does a consolidation offer beat your blend?
A consolidation loan pays off several debts and leaves you one payment. It's a clear saving when two things hold: its APR beats your blended rate, and it doesn't stretch your payoff.
The APR matters because a headline rate can hide fees. The CFPB describes the APR as the interest rate plus any additional fees charged by the lender, including origination charges. The APR calculator turns a fee into a rate.
The Fed's G.19 release of September 8, 2026 gives commercial-bank averages for the second quarter of 2026. Credit card accounts assessed interest averaged 22.15%, and 24-month personal loans 11.86%.
Say you owe $6,000 on a card at 22.15% and $9,000 on a personal loan at 11.86%. You plan to clear both in three years. Your blend is (6,000 × 22.15% + 9,000 × 11.86%) ÷ 15,000 = 15.98%. Now test a $15,000 offer at 12.99%:
| Offer | Upfront fee | Term | APR |
|---|---|---|---|
| No fee | $0 | 3 yr | 12.99% |
| 3% fee | $450 | 3 yr | 15.13% |
| 6% fee | $900 | 3 yr | 17.38% |
| 6% fee, longer term | $900 | 5 yr | 15.78% |
With no fee, 12.99% clears 15.98% easily, and a 3% fee still passes. A 6% fee on three years lifts the APR to 17.38%, so the offer loses. Over five years the same fee just passes at 15.78%, but the longer term fails the second test. The APR also assumes you keep the loan to the end; repay early and the fee costs more per year.
And consolidate only what costs more than the offer. Moving just the card to the 12.99% loan gives (6,000 × 12.99% + 9,000 × 11.86%) ÷ 15,000 = 12.31%. That beats folding in the cheaper loan.
A lower payment can still cost more
According to the CFPB, a lower monthly payment may be because you're paying over a longer time. That could mean paying a lot more overall. Here's the same case without fees:
| Debt | Balance | Rate | Term | Monthly payment | Total interest |
|---|---|---|---|---|---|
| Card | $6,000 | 22.15% | 3 yr | $229.61 | $2,266 |
| Personal loan | $9,000 | 11.86% | 3 yr | $298.33 | $1,740 |
| Consolidation loan | $15,000 | 12.99% | 3 yr | $505.34 | $3,192 |
| Consolidation loan | $15,000 | 12.99% | 5 yr | $341.22 | $5,473 |
| Consolidation loan | $15,000 | 12.99% | 7 yr | $272.80 | $7,915 |
Paying off both debts in three years costs $2,266 + $1,740 = $4,006 in interest, at $527.94 a month. The consolidation loan over three years costs $3,192, saving $814. Over five years the payment falls to $341.22, but interest climbs to $5,473. That's $1,467 more than keeping your current debts. The debt consolidation calculator gives your own offer's payment and total interest.
Keeping a cheap mortgage and adding a HELOC
The same sums help with a common homeowner question. Should you refinance everything? Or keep a low first-mortgage rate and borrow the extra on a home equity line of credit (HELOC)? Say you owe $240,000 at 3.25% and the HELOC charges 8.5%:
| HELOC balance | HELOC rate | Blended rate | Interest per year |
|---|---|---|---|
| $30,000 | 8.5% | 3.83% | $10,350 |
| $60,000 | 8.5% | 4.3% | $12,900 |
| $100,000 | 8.5% | 4.79% | $16,300 |
| $60,000 | 10.5% | 4.7% | $14,100 |
Freddie Mac's survey put the average 30-year fixed rate at 7.03% on September 24, 2026. The survey focuses on home purchase loans for borrowers who put 20% down and have excellent credit.
Even a $100,000 line keeps the blend under 5%, because the cheap mortgage carries most of the weight. At $60,000, a 2-point rise in the HELOC rate lifts the blend by only 0.4 points. At that 7.03% average, refinancing all $300,000 would mean $21,090 of interest a year, against $12,900 on the blend.
The blend ignores terms, so check the monthly cost with the HELOC calculator. And the CFPB calls using a home equity loan to consolidate credit card debt risky. If you don't pay it back, you could lose your home in foreclosure.
Federal student loans use the same average
According to the CFPB, a federal Direct Consolidation Loan has a fixed interest rate. It's the weighted average of the loans' rates, rounded up to the nearest one-eighth of a percent.
Consolidate $12,000 at 5% and $8,000 at 6.5%, and the blend is (12,000 × 5% + 8,000 × 6.5%) ÷ 20,000 = 5.6%. Rounding up to the next eighth gives 5.625%, so federal consolidation can match your blend but never beat it.
Refinancing federal loans with a private lender is a different trade. The CFPB says you will no longer qualify for certain repayment programs or plans. For federal loans, those include income-driven repayment.
Sources
- CFPB, What do I need to know about consolidating my credit card debt? (reviewed September 2, 2026)
- CFPB, What is the difference between a loan interest rate and the APR? (reviewed August 28, 2026)
- CFPB, Should I consolidate or refinance my student loans? (reviewed December 3, 2024)
- Federal Reserve, G.19 Consumer Credit: Terms of Credit (release of September 8, 2026)
- Freddie Mac, Mortgage Rates Average 7.03%, Primary Mortgage Market Survey (September 24, 2026)