Loan Comparison Calculator
Weigh up to three loan offers against each other. Enter a rate, term, optional origination fees and an optional down payment for each option to see every monthly payment, the total interest, the true cost including fees, and which loan is cheapest over its life.
Formula
Worked example
$25,000 with no down payment at 7.5% for 5 years (60 months): r = 0.075/12 = 0.00625, M ≈ $500.95, interest ≈ $5,057. At 6.0% for 7 years (84 months): M ≈ $365.21, interest ≈ $5,678. Add a $300 fee to Loan B and its true cost is $5,978, so Loan A wins by about $921 even though its rate is higher.
Why monthly payment and total cost disagree
Two loans can each look like the better deal depending on which number you watch. Spreading the same amount over a longer term shrinks the monthly payment, which feels affordable, but every extra month is another month of interest accruing on the balance. A loan with a slightly higher rate but a shorter term often costs far less in total, even though its monthly payment is larger. This calculator shows the payment, the total interest and the true cost for each option, so the trade-off is explicit rather than hidden behind one headline number.
True cost: folding in fees and a down payment
A headline interest rate rarely tells the whole story. Lenders often charge origination fees, discount points or closing costs upfront, and those charges can flip which loan is genuinely cheaper. Enter each loan's fees and the calculator adds them to its interest to produce a true cost, the figure that decides the winner. You can also enter a down payment, which is subtracted from the loan amount so only the financed balance is amortized. Comparing every option on the same amount and the same down payment isolates exactly what each rate, term and fee structure costs you.
How each loan is amortized
Each option is priced with standard amortization: a fixed monthly payment is calculated so the balance reaches zero after the final installment. Early payments are mostly interest because the balance is large; later payments are mostly principal. Total interest is the sum of every payment minus the amount financed, and the balance chart and yearly schedule below show how fast each loan is paid down. Add a third loan to compare three offers at once when you have several quotes on the table.
Compare APR, not just the rate
When a lender quotes an APR rather than a nominal rate, that APR already folds in many fees, so entering the APR with zero extra fees gives a fair comparison. If you only have the nominal interest rate and a separate fee figure, enter both and let the true cost line them up. A loan advertising a lower interest rate can still carry a higher effective APR once charges are added. These results are estimates for planning; verify the exact figures, any prepayment penalties and the official APR in each lender's disclosure before committing.
How term, rate and fees move your costs
| Choice | Effect on monthly payment | Effect on total cost |
|---|---|---|
| Longer term | Lower | Higher |
| Shorter term | Higher | Lower |
| Lower rate | Lower | Lower |
| Higher rate | Higher | Higher |
| Higher upfront fees | No change | Higher |
| Larger down payment | Lower | Lower |
Same financed amount, illustrating the payment-versus-cost trade-off.
Frequently asked questions
Should I choose the lower payment or the lower total cost?
If you can comfortably afford the higher monthly payment, the loan with the lower true cost usually saves the most money. Choose the lower payment only if cash flow is tight and the extra interest is a price worth paying for breathing room.
Why does the loan with the higher rate sometimes cost less?
Usually because its term is shorter. Interest accrues over time, so a loan repaid in 5 years can pay less total interest than one at a lower rate stretched over 7 years. Term length, rate and fees together determine the true cost, which is the figure this calculator uses to pick the winner.
How do fees and points change the comparison?
Enter each loan's origination fees, discount points or closing costs in its fee box. The calculator adds them to that loan's interest to produce a true cost, so a loan with a tempting low rate but heavy upfront charges no longer looks artificially cheap.
Can I compare three loans at once?
Yes. Turn on the "Add a third loan" toggle to enter a rate, term and fees for Loan C. All three options are then ranked by true cost, and the chart and yearly schedule include the third balance line.
Does the down payment affect the comparison?
A down payment is subtracted from the loan amount, so only the financed balance is amortized. Because the same down payment applies to every option, it lowers all payments equally and does not change which loan ranks cheapest, but it does give you a realistic payment figure.