A Blended Rate is an interest rate that is charged on a loan that represents the combination of a previous rate and a new rate. The loan agreement is amended to show the new interest rate, which applies from the beginning of the next period. The new rate may be higher or lower than the previous one, but it will usually be applied to all outstanding loan balances, including any part that has been repaid.There are several reasons why someone might want to use a blended interest rate instead of sticking with one fixed interest rate. For example, if market conditions have changed since you took out your original loan, using a blended interest rate could save you money in the long run by reflecting current rates rather than older ones. Additionally, if you're struggling to make your monthly payments but don't want to completely lose your headway on repaying your debt, then using a fixed-blend interest rate can help keep things more affordable while still giving you some breathing room financially each month.Of course there are also some potential drawbacks associated with blending rates as well - for instance if market conditions take a turn for the worse after signing up for a blender edge deal then you could end up paying more overall in the long run as opposed to sticking with one fixed interest rate from the start (although this isn't always guaranteed). Ultimately it's important to understand what kind of scenario makes the most sense for you and your personal financial situation before deciding whether or not to use a blended interest rate option.
