U.S. student loans · Consolidation
Direct Consolidation Loan rate calculator.
List the balance and rate of each loan you would consolidate. See the weighted average, the rounded-up consolidation rate and what the rounding costs a year.
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The short answer
A Direct Consolidation Loan has one fixed rate: the weighted average of the rates on the loans you consolidate, rounded up to the nearest one-eighth of one percent. Example: $5,500 at 4%, $7,000 at 5.5% and $9,000 at 7% (illustrative rates) weight to 5.7442%, which rounds up to 5.750%. On $21,500.00 that rounding adds $1.25 a year.
Rule. Federal Student Aid says the fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent, and 34 CFR 685.202(a)(10)(i)(F) says the same for applications received on or after July 1, 2013. The weights are the loan balances.
Reading the result. Consolidating does not lower your average rate; it can only round it up by up to 0.125 points. The reasons to do it are other terms, and Federal Student Aid also lists longer repayment and more interest overall among the disadvantages, so check the consolidation page in Sources.
Frequently asked questions
How is the interest rate on a consolidation loan set?
It is the weighted average of the rates on the loans you consolidate, rounded up to the nearest one-eighth of one percent, and it is fixed for the life of the loan.
Will consolidating lower my interest rate?
No. The weighted average can only stay the same or round up by less than 0.125 percentage points.
What is a weighted average here?
Each loan’s rate counts in proportion to its balance: add up balance times rate for every loan and divide by the total balance.
Which loans can be consolidated?
See the list in 34 CFR 685.220 and on studentaid.gov. This tool only does the rate arithmetic.
Sources
Checked
- Federal Student Aid: Student Loan Consolidation
- eCFR: 34 CFR 685.202, Charges for which Direct Loan Program borrowers are responsible
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Estimate only
Arithmetic only. Confirm the final rate with Federal Student Aid before you apply; accrued interest and other terms can change what you owe.