Federal Consolidation Weighted Average Rate Calculator
Estimate the fixed interest rate for a new Direct Consolidation Loan. The tool first calculates the balance-weighted average, then applies the federal rule that rounds up to the nearest one-eighth of one percent.
Calculator for a Direct Consolidation Loan's balance-weighted interest rate and required upward rounding.
Loans to consolidate
Enter each loan's outstanding principal balance and annual interest rate.
The federal consolidation rate is the balance-weighted average rounded up to the nearest one-eighth of one percent.
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Your results
Estimated Direct Consolidation Loan rate
5.625%
2 loans included; total principal $30,000.
Calculation detail
Unrounded balance-weighted rate
5.6%
Before the federal round-up to a 0.125% increment.
This calculator applies the federal consolidation-rate rule. It is not a private-refinance quote.
The resulting rate is fixed for the life of the Direct Consolidation Loan, subject to the statutory maximum rate.
How the Consolidation Rate Is Calculated
Multiply each included loan’s principal balance by its interest rate, add those products, and divide by the total included principal balance. Then round the result upward to the next 0.125% increment. For example, 5.600% becomes 5.625%, while an exact 5.625% stays 5.625%.
The governing rules are 34 C.F.R. § 685.202(a)(7) and 20 U.S.C. § 1087e(b)(5).
Limits of the Estimate
This is a rate estimate, not a recommendation to consolidate. Consolidation can affect payment counts, repayment-plan access, borrower benefits, and capitalization. The Department’s final rate depends on the loans and balances actually included.
Federal Consolidation Rate FAQs
It rounds up to the nearest higher one-eighth of one percent. A weighted average already equal to an exact one-eighth does not move to the next increment.
Not under this formula. The rate starts with the balance-weighted average of the included loans and then rounds upward, so consolidation is not an interest-rate reduction strategy.
Use the outstanding principal balance expected to be included for each loan. Accrued interest that capitalizes during consolidation can change the final figures used by the Department.
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