Loan Consolidation Calculator
One Payment, One Rate, One Rounding Rule
Federal loan consolidation doesn't average your rates in the way most people expect — it computes a balance-weighted average of the rates on the loans being combined, then rounds that figure up to the nearest one-eighth of a percentage point. That rounding step is a fixed rule, not an estimate, and it means the consolidated rate is always slightly at or above the true weighted average, never below it. This calculator applies that exact rule so the projected rate and payment match what a federal consolidation would actually produce.
The Formula
(rounded up to nearest 1/8%)
Once the consolidated rate is set, the new monthly payment uses the standard amortization formula against the combined balance and chosen repayment term.
Worked Example: Three Loans Into One
| Loan | Balance | Rate |
|---|---|---|
| Loan 1 | $15,000 | 5.0% |
| Loan 2 | $10,000 | 6.8% |
| Loan 3 | $5,000 | 7.5% |
| Total | $30,000 | — |
Weighted average rate: (15,000×5.0% + 10,000×6.8% + 5,000×7.5%) ÷ 30,000 = 6.0167%, rounded up to 6.125% (the nearest 1/8%). At that rate over 15 years, the new monthly payment is $255.19, with total interest of $15,933.75.
Where This Calculation Matters
- Simplifying multiple servicers — combining several federal loans into one payment reduces the chance of a missed payment across multiple accounts.
- Accessing repayment plans — some income-driven or forgiveness-adjacent plans require or work more cleanly with a consolidated loan.
- Understanding the rate impact — because the new rate rounds up, consolidation is a payment-simplification tool, not an interest-rate-reduction tool, and this calculator makes that distinction visible.
How to Use This Calculator
- Enter the balance and interest rate for Loan 1.
- Optionally enter the balance and rate for Loan 2 and Loan 3 if consolidating more than one loan.
- Enter the new consolidated repayment term in years.
- Select Calculate to see the consolidated rate, new monthly payment, and total interest.
Related Calculations
Compare the resulting payment against the Student Loan Payment Calculator for a single loan, or check the Student Loan Refinance Calculator if you're considering a private refinance instead of federal consolidation.