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%.

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