Blended Rate

A blended rate is an charge per unit applied to a loan that mixes an earlier rate with a newer rate. Blended rates are typically provided by refinancing existing loans at an charge per unit that’s greater than the speed on the prior loan but less than the rate on a brand new loan.

For accounting purposes, this sort of rate is calculated to assist determine the real debt obligation for variety of loans with various interest rates or the revenue from several streams of interest.

Lenders utilize a blended rate to incentivize borrowers to refinance their current low-interest loans and to work out the pooled cost of funds. A weighted average rate on business debt is additionally represented by these rates. the speed that results is thought to be the whole rate of interest on business debt.

Individual borrowers who refinance a private loan or a mortgage are likewise subject to blended rates. Consumers can find variety of free online calculators to work out their blended  average interest rate following a refinance.