Loan comparison calculator
Compare two borrowing offers on the same footing.
- Formula and assumptions shown
- Table and CSV export
- Runs in your browser
Inputs
Result
Assumptions used
Enter your numbers to see an estimate.
Assumptions and methodology
Balance over time
Monthly viewChart data will appear here as a text summary.
How it works
Each option is amortized monthly from the shared loan amount and its own nominal annual rate and term. The comparison separates recurring principal-and-interest payments from any upfront fee so a lower payment does not hide a higher total cost.
A longer term usually lowers the required monthly payment but can increase interest. A shorter term can cost more each month while reducing the time the balance accrues interest. Compare both the monthly amount and the total before choosing a fit for your budget.
Fees can reverse a comparison. A lower rate that comes with an upfront fee is cheaper overall only if the interest it saves exceeds the fee, so look at the gap in total cost, not just the gap in payments. The result names the offer with the lower total and by how much, including fees.
Assumptions
- Both options are fixed-rate, fully amortizing loans with monthly payments. They share one loan amount; each offer has its own rate, term, and upfront fee.
- Rates are nominal annual percentages divided by 12, and each option keeps its rate unchanged for the selected term.
- Upfront fees are treated as paid at origination and added to each offer's total cost; they are not financed. To model financed fees, add them to the loan amount, which then applies to both offers because the amount is shared.
- The comparison excludes taxes, insurance, recurring account fees, prepayment penalties, adjustable rates, and lender-specific rounding.
Worked example
Two 5-year offers on $25,000
Offer A at 6.5% with a $250 upfront fee has a $489.15 monthly payment and a $29,599.22 total cost. Offer B at 7.25% with no fee costs $497.98 a month and $29,879.04 in total. Despite its fee, Offer A costs $279.82 less under these assumptions.
Step by step
- Compute each payment. Offer A: 6.5% ÷ 12 = 0.5417% a month over 60 months gives $489.15. Offer B: 7.25% ÷ 12 = 0.6042% a month over 60 months gives $497.98.
- Total the scheduled payments. Over 60 months, Offer A’s payments total $29,349.22, of which $4,349.22 is interest. Offer B’s total $29,879.04, of which $4,879.04 is interest.
- Add the upfront fees. Offer A’s $250 fee brings its total cost to $29,599.22. Offer B has no fee, so its total cost stays at $29,879.04.
- Take the difference. $29,879.04 − $29,599.22 = $279.82 in Offer A’s favor. Put another way, A’s lower rate saves $529.82 of interest, and its $250 fee uses up less than half of that.
- Find the fee that would flip the result. Offer A stays cheaper as long as its fee is below $529.82, the interest its lower rate saves over the full 5 years.
How to read your result
The headline names the offer with the lower total cost and the amount by which it is lower, counting scheduled payments and upfront fees. The secondary figures show each offer’s monthly payment, each total cost, and the two fees. Payment answers what fits the monthly budget; total cost answers which loan is cheaper if held to the end.
The chart and table follow both balances month by month, with each offer’s payment. When the terms differ, one balance reaches zero before the other, and the totals cover different lengths of time.
The totals assume each loan runs its full term. If a loan is paid off early, a fee paid upfront has already been spent while part of the lower rate’s interest saving never arrives, so an offer that wins on paper can lose. The comparison also does not discount future payments, and it excludes taxes, insurance, prepayment penalties, and variable rates.
What changes the result most
- Term length
- If Offer B were stretched to 7 years at 7.25%, its payment would fall to $380.38, but its total cost would rise to $31,951.89, which is $2,352.67 more than Offer A.
- Loan amount against a fixed fee
- A flat fee weighs more on a small loan. With the same rates and fee, Offer A costs $38.07 more than Offer B on a $10,000 loan, but $809.64 less on a $50,000 loan, because the interest saved grows with the balance while the fee does not.
- Fee size
- On the $25,000 example, the lower-rate offer saves $529.82 of interest. Any fee above that amount makes it the more expensive loan over 5 years.
Questions
Why compare total cost as well as payment?
The monthly payment reflects cash flow, while total cost includes all modeled payments and upfront fees. A smaller payment can cost more over a longer term.
Are APR and interest rate interchangeable here?
No. Use the rate that matches the calculator's fixed nominal-rate assumption. APR may include fees or use disclosures that do not map directly to the simple payment model.
Will this tell me which offer to accept?
It helps make the tradeoff visible, but it cannot account for every contract term or your budget. Review the lender's disclosure, fees, penalties, and rate conditions before deciding.
How do I compare two loans with different terms?
Look at both the monthly payment and the total cost. A longer term almost always lowers the payment and raises total interest, because the balance is outstanding for more months. In the example, a 7-year Offer B at 7.25% costs $380.38 a month against Offer A’s $489.15, but $2,352.67 more in total. The table shows both balances side by side so the difference in time is visible.
What if I plan to pay the loan off early?
The comparison assumes both loans run their full terms. An early payoff shortens the period over which a lower rate saves interest, while an upfront fee has already been paid, so a low-rate, high-fee offer becomes less attractive the sooner the loan is repaid. Check the contract for prepayment penalties as well.
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Sources
These references explain the concepts behind the calculation. They do not endorse this site. Estimates leave out any cost or condition you did not enter.