Blended Rate

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Blended Rate

1. A weighted average interest rate on all of a person's or company's debt. The blended rate provides the aggregate interest rate for debt. For example, if one pays 5% on $50,000 in debt and 10% on $25,000 in other debt, the blended rate is calculated as:

Blended Rate = (50,000 * 0.05 + 25,000 * 0.10) / 75,000 = 6.67%.

2. When refinancing a loan, an interest rate higher than the previous rate, but lower than the rate the bank would charge on a new loan. A blended rate may be used after a bank has raised its prevailing rates.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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