Loan Comparison Calculator
Compare the true cost of two loans—monthly payment, total interest, fees, and effective APR—so you can pick the cheapest option with confidence.
Loan details
Side-by-side comparison
| Metric | Loan A | Loan B |
|---|---|---|
| Monthly payment | $501 | $519 |
| Total interest | $5,057 | $6,138 |
| Upfront fees | $200 | $0 |
| Total cost (payments + fees) | $30,257 | $31,138 |
| Effective APR (incl. fees) | 1200.00% | 1200.00% |
| Cheaper overall | — | |
Results interpretation
- Lower APR usually wins on monthly payment and total interest—unless the loan with the lower APR has much higher upfront fees.
- Short terms raise the payment but slash total interest; longer terms lower the payment but increase interest.
- Use effective APR (incl. fees) to compare “points/origination” vs. “no-fee” offers on equal footing.
- This tool fits personal, auto, student, and other fixed-rate amortizing loans.
How this calculator works
Formula & assumptions
Monthly payment uses the standard amortization formula: pmt = L·r / (1 − (1 + r)−n), where L is amount,r is monthly APR, and n is months.
Total interest = pmt × n − amount. Total cost adds any upfront fees.
Effective APR (incl. fees) solves the monthly rate where the present-value of payments equals amount − fees (binary search). It’s a practical way to compare “no-fee” vs. “points” options.
Assumptions: fixed-rate, fully amortizing, payments monthly; ignores taxes/insurance/late fees. Treat results as planning estimates.
How to use this Loan Comparison Calculator
- Enter Loan A: amount to borrow, APR, term (years), and any upfront fees (origination, points).
- Enter Loan B with the same amount and term first, then change just one lever (rate or fees) to see impact.
- Review the side-by-side table: monthly payment, total interest, fees, total cost, and effective APR including fees.
- If you expect an early payoff/refi, prefer low/zero fees over tiny rate drops.
- Pick the option with the lowest total cost that still fits your budget and risk tolerance.
Tip: If cash flow is tight, a longer term can help—just check how much extra interest it adds in the “Total cost” row.
Use cases & examples
Example 1 (Auto): $25,000 for 60 months. Offer A: 7.5% APR with $200 fee. Offer B: 9.0% APR, no fee. Monthly is lower on A, and total cost is usually lower—A wins.
Example 2 (Personal loan): $12,000 for 36 months. A: 12% APR, $0 fee. B: 11% APR, $600 fee. Monthly is slightly lower on B, but the fee can flip the total cost—check the “Total cost” line and effective APR.
Example 3 (Student refi): Same amount and term, but one lender offers a lower rate with a higher origination fee. If you’ll keep the loan for the full term, the lower rate often wins; for early payoff, the no-fee option can be better.
Loan Comparison Calculator: How to Pick the Cheapest Loan (Without Guesswork)
A modern Loan Comparison Calculator removes the guesswork from choosing between offers. Two loans with similar interest rates can have very different total costs once you account for origination fees, points, and term length. The tool above compares monthly payment, total interest, effective APR (including fees), and overall cost so you can move forward with confidence—whether the loan is personal, auto, student, or another fixed-rate amortizing loan.
What actually makes one loan cheaper?
Most shoppers look only at the APR, but three levers control what you’ll really pay: (1) the interest rate, (2) the term (months you repay), and (3) any upfront fees that reduce the cash you receive. A slightly lower rate with a large fee can cost more than a higher-rate, no-fee option—especially if you plan to pay off early or refinance.
Rate vs. term: payment comfort vs. lifetime cost
A longer term lowers the monthly payment but increases lifetime interest. A shorter term raises the payment but cuts interest dramatically. When comparing two loans, decide which matters most: monthly affordability today, or the smallest total dollar cost across the life of the loan. The calculator shows both so you can balance payment comfort with long-run savings.
How fees change the “real” APR
Upfront charges (origination, points, documentation) don’t change the sticker rate, but they change theeffective APR because you net less cash than you borrow. Our comparison estimates an APR thatincludes fees by solving for the monthly rate where the present value of payments equals amount minus fees. Use this to compare “no-fee” versus “points” quotes on level ground.
Short horizon vs. full term: why your timeline matters
If you’ll hold the loan for only a year or two—common with auto loans, personal loans for home projects, or when you expect to refinance—upfront fees loom larger than the rate because you don’t pay many months of interest. In that case, a slightly higher rate with $0 fee can be cheaper. If you’ll keep the loan to maturity, the lower rate often wins even with a moderate fee.
Practical checklist for side-by-side comparisons
- Match the same amount and term. Change only one lever at a time to see the impact.
- Enter fees accurately. Include origination and points; ignore optional add-ons you won’t buy.
- Look beyond payment. Check Total cost and Effective APR (incl. fees).
- Consider your exit plan. Early payoff or refinance? Favor low fees over a tiny rate drop.
- Stress-test the payment. Make sure the monthly fits your budget even if income or expenses change.
Common mistakes (and how to avoid them)
Only comparing APR. APR is useful, but it hides fees and assumes you’ll hold the loan for the full term. Use total cost and effective APR to see the whole picture.
Chasing the lowest payment. A rock-bottom monthly can mask thousands more in interest. Verify the lifetime cost so you’re not paying for today’s comfort with tomorrow’s dollars.
Ignoring prepayment plans. If you plan to add principal each month, your realized cost will be closer to a no-fee option. The calculator’s totals assume regular payments; if you’ll prepay aggressively, weigh fees even more carefully.
How to get a cheaper offer (even before you compare)
- Improve credit to qualify for a lower rate or fewer points.
- Shop 3–5 lenders within a short window—rate checks are often treated as one inquiry.
- Ask for a no-fee quote alongside a “points” quote to see the trade-off clearly.
- Pick the shortest term you can afford without straining cash flow.
- Skip unnecessary add-ons that inflate financed amount and interest.
Putting it all together
The fastest path to the right decision is to enter both offers in the Loan Comparison Calculator, review the monthly payment, total interest, total cost, and effective APR, then select the option that matches your priorities. If cash flow is tight, a longer term may be appropriate—but verify how much it adds in lifetime cost. If you want the cheapest path overall, aim for the smallest total cost at a payment that still leaves room for savings and surprises.
Money decisions are easier when they’re visible. With clear numbers—rate, term, and fees—you’ll know if a flashy offer really saves money or simply shifts cost from one place to another. Use the comparison, confirm it aligns with your goals, and borrow on your terms.
Loan Comparison — FAQ
What matters most when comparing loans?
Look at total cost (payments + fees), not just APR. Fees can flip the winner, especially for short holding periods.
How do upfront fees affect APR?
Fees reduce the cash you actually receive, so the effective APR (incl. fees) is higher than the sticker APR. The calculator estimates this for apples-to-apples comparisons.
Is a longer term ever cheaper overall?
Rarely. Longer terms lower the monthly payment but usually increase total interest and total cost.
Do extra principal payments change the comparison?
Yes—if you’ll prepay, fees matter more than tiny rate differences. Low-fee loans often win for early payoff plans.
What about prepayment penalties?
Some loans charge a fee if you pay off early. Add that potential cost to your decision—penalties can offset savings from a lower rate.
Can I use this for auto, personal, or student loans?
Yes. It models any fixed-rate, fully amortizing loan with monthly payments.
Best way to compare “no-fee” vs. “points” loans?
Keep amount and term the same. Then compare Total cost and Effective APR (incl. fees). If you’ll keep the loan long-term, a lower rate with modest points may win; for short horizons, no-fee often wins.
Should I refinance later if rates fall?
Possibly. Weigh expected savings against new closing costs, loan reset to a new term, and any prepayment penalties on your current loan.