Loan Comparison Calculator
Compare two loan offers by monthly payment, total interest, fees, total repayment, and overall estimated cost.
Loan A
Loan B
Loan Comparison Results
This calculator provides an estimate only. Actual loan costs may differ because of APR rules, compounding, lender fees, payment timing, prepayment rules, insurance, taxes, late fees, and whether fees are paid upfront or financed.
Use this Loan Comparison Calculator to compare two fixed-payment loan offers by monthly payment, total interest, fees, and overall estimated borrowing cost.
Important: A lower monthly payment does not always mean a cheaper loan. Interest rate, repayment term, and fees can significantly change the total amount you pay.
Loan Comparison Calculation Method
For each loan, the calculator converts the annual interest rate to a monthly rate:
Monthly rate = annual interest rate ÷ 12 ÷ 100
The estimated fixed monthly payment is:
Monthly payment = P × r × (1 + r)n ÷ [(1 + r)n − 1]
Where:
- P = loan principal
- r = monthly interest rate
- n = total number of monthly payments
Total repayment = monthly payment × number of payments
Total interest = total repayment − loan principal
If a percentage fee is entered:
Loan fee = loan amount × fee percentage ÷ 100
For comparison purposes:
Estimated borrowing cost = total interest + entered loan fee
Cost difference = higher borrowing cost − lower borrowing cost
Example
Suppose you are comparing two $10,000 loans:
- Loan A: 8% interest for 5 years
- Loan B: 10% interest for 3 years
- No additional fees
For Loan A:
Monthly payment ≈ $202.76
Total repayment ≈ $12,165.84
Total interest ≈ $2,165.84
For Loan B:
Monthly payment ≈ $322.67
Total repayment ≈ $11,616.19
Total interest ≈ $1,616.19
Loan A has the lower monthly payment, but Loan B costs approximately $549.65 less in total interest.
This illustrates why both monthly affordability and total borrowing cost should be considered when comparing loans.
Important Notes
- This calculator is best suited to fixed-rate loans with regular monthly payments.
- Compare loans with similar loan amounts and use equivalent rate and fee information whenever possible.
- APR and interest rate are not necessarily the same. APR may include certain lender fees in addition to interest.
- A longer repayment term generally lowers the monthly payment but can increase total interest.
- Entered fees are included in the cost comparison, but actual lenders may deduct fees upfront, charge them separately, or finance them into the loan.
- If a fee is financed into the loan balance, the actual monthly payment and interest cost may differ from this estimate.
- Variable rates, promotional rates, insurance, taxes, late charges, prepayment penalties, and other lender-specific costs are not fully modeled.
- The option identified as cheaper is based on estimated financial cost only. Monthly affordability and loan terms should also be considered.