Your weighted average rate blends each loan’s rate by its balance, and a Direct Consolidation Loan rounds that average UP to the next one eighth of one percent. Consolidating therefore never lowers your interest rate.
All figures on this page computed on September 4, 2026 with the Finology Software engine (engine date 2026-09-04, rules ledger rl1-e9e3bcda3054f95c). Each constant is cited to its primary source below. Estimates for planning only, not advice.
What is my weighted average interest rate?
Each loan’s rate is weighted by how much you owe on it. The examples below show the blend, the consolidation rate that follows, and the term a consolidation would carry.
| Loan mix | Loans | Total balance | Weighted average rate | Consolidation rate | Round up | Consolidation term |
|---|---|---|---|---|---|---|
| Two undergraduate Direct loans | 2 | $27,000 | 5.0689% | 5.125% | +0.0561% | 20 years |
| Undergraduate plus one Grad PLUS | 2 | $67,000 | 6.5366% | 6.625% | +0.0884% | 30 years |
| A typical four-loan undergraduate spread | 4 | $27,500 | 4.7587% | 4.875% | +0.1163% | 20 years |
| Undergraduate plus Parent PLUS | 2 | $90,000 | 7.05% | 7.125% | +0.075% | 30 years |
| Two loans already on an eighth | 2 | $20,000 | 6.25% | 6.25% | none, already on an eighth | 20 years |
Does consolidating lower my rate?
No. The rounding only ever runs upward, so the consolidation rate is equal to or higher than the average you already pay. On the four loan undergraduate spread above, a 4.7587% average becomes 4.875%, an increase of 0.1163%. When the average already sits on an eighth the round up does nothing at all.
So what does consolidating actually change?
The term, mostly. A Direct Consolidation Loan takes a balance based standard term running from 10 up to 30 years, so a larger balance can stretch repayment a long way and raise total interest even when the rate barely moves. Whether that trade is worth making is covered in should I consolidate my student loans.
Run your own numbers
Enter your own loans below. The calculator uses the same engine and the same cited rule as the table above.
Frequently asked questions about the weighted average rate
How is the weighted average interest rate calculated?
Each loan’s rate is weighted by its balance, not counted equally. A large loan at a low rate pulls the average down far more than a small loan at a high rate pulls it up, so the weighted average is usually nowhere near the simple average of the rates.
What interest rate will a Direct Consolidation Loan have?
The balance weighted average of the loans you consolidate, rounded UP to the next one eighth of one percent. On the undergraduate plus Grad PLUS example on this page that is a 6.5366% average becoming a 6.625% consolidation rate.
Does consolidating lower my interest rate?
No. Consolidation never lowers your rate. The rounding runs upward only, so the consolidation rate is always equal to or higher than the true weighted average you already pay. It can simplify servicing and change your term, but it is not a refinancing.
What if my weighted average already lands on an eighth?
Then the round up is a no operation and the rate is unchanged. The last row on this page is that case: two loans both at 6.25% give a 6.25% average and a 6.25% consolidation rate, with no increase.
How much does the round up actually cost?
Less than one eighth of one percent by definition, and often much less. Across the examples on this page the increase ranges from nothing to 0.1163%. The bigger consequence of consolidating is usually the term, not the rate.
Does consolidating change how long I repay?
Yes, and this is the part that moves real money. A Direct Consolidation Loan gets a balance based standard term from 10 up to 30 years, so a larger consolidated balance can stretch repayment considerably and increase total interest even at a nearly identical rate.
Where these numbers come from
Every figure on this page is computed by the same engine that serves advisors inside Finology Software, and each constant below is carried with its authority and the date we last checked it against that authority. The weighted average is a derived figure rather than a whole plan projection, so it is cited to source rather than parity verified.
- Direct Consolidation rate rounding step, 34 CFR 685.220. Effective 1994-07-01, last verified 2026-07-09. Primary source.