Loan Comparison Calculator

Use this calculator to compare two loans side by side by monthly payment, interest cost, fees, and total cost. It helps you avoid choosing a loan based only on the lowest payment.

What this calculator does

The loan comparison calculator evaluates two borrowing options.

It uses:

• loan amount
• interest rate
• loan term
• upfront fees

The result shows estimated payments and cost difference, then identifies which option is cheaper based on total cost including fees.

How to use the loan comparison calculator

Enter the details for Loan A and Loan B. Use the same loan amount if you are comparing lenders, or different amounts if you are comparing different borrowing scenarios.

Look at both the monthly payment and total cost. A loan with lower monthly payments can still cost more if the term is longer or fees are higher.

Loan Comparison Formula

Monthly payment = P x [r(1+r)^n] / [(1+r)^n - 1]

Total cost = monthly payment x number of payments + upfront fees

Example calculation

If:

• Loan A = 30,000 at 8% for 5 years
• Loan A fees = 500
• Loan B = 30,000 at 7% for 6 years
• Loan B fees = 900

Then:

Total cost = monthly payment x term + fees

The calculator compares both total costs and highlights the lower-cost option.

What is a loan comparison?

A loan comparison reviews more than the advertised rate. It considers the amount borrowed, repayment term, fees, monthly payment, interest, and total cost.

This makes it easier to compare offers that look similar at first glance.

Interpreting your result

The cheaper option is based on estimated total cost. Still consider flexibility, early repayment rules, lender service, and whether the monthly payment fits your budget.

When to use this calculator

Use this calculator when you want to:

• compare lender offers
• test different loan terms
• include upfront fees
• choose a lower-cost option

Common mistakes

Common mistakes include:

• comparing rates only
• ignoring upfront fees
• choosing the longest term automatically
• forgetting early payoff rules

FAQs

Which loan is best?

The lower total cost is often better financially, but affordability and loan terms also matter.

Why include fees?

Fees are part of the borrowing cost and can change which loan is cheaper.

Can I compare different loan amounts?

Yes, but equal amounts are easier for lender-to-lender comparison.

Is this financial advice?

No. It provides planning estimates only.