# Stafford Loan Consolidation Interest Rate

Stafford Loan consolidation interest rates are determined by a weighted average of your current rates. While consolidation can help lower your monthly payment and make the process easier to manage, there is no opportunity to refinance for a lower interest rate. Below, we'll walk you through the consolidation interest rate formula.

## Calculating the Weighted Average Interest Rate

Follow the example below to calculate the *weighted average interest rate* for a federal loan consolidation.

## Step 1

Multiply each loan by its interest rate to obtain the *per loan weight factor*.

$10,000 * 6.543% = 654.3

$5,000 * 7.943% = 397.5

## Step 2

Add the per loan weight factors together.

654.3 + 397.5 = 1051.8

## Step 3

Add the loan amounts together.

$10,000 + $5,000 = $15,000

## Step 4

Divide the *total per loan weight factor* by the total loan amount and then multiply by 100. This will give you the actual interest rate.

1051.8 / $15,000 = 7.012%

## Step 5

Then round to the next nearest 1/8%.

7.012% to the nearest 1/8% = 7.012%

Your estimated consolidation interest rate would then be 7.012%.