Loan Comparison Calculator

Loan comparison calculator to compare payments, interest, and total cost

This loan comparison calculator helps you choose between two borrowing options by putting the numbers side by side. If you are deciding between two quotes from different lenders, considering a refinance, or comparing a lower rate with higher fees, the most useful view is not just the interest rate. You want to see the monthly payment you will actually pay, the total interest over the full term, and the total cost once fees are included.

Most people compare loans by the headline rate because it is the easiest number to see. That is often the wrong comparison. A slightly higher rate with low fees can be cheaper overall than a lower rate with large initiation fees. A shorter term can cost you less in interest but push the monthly payment beyond what your budget can handle. This calculator is built to show those trade-offs clearly using the standard amortization math that lenders typically use for fixed monthly repayments.

To use it, enter the details for Loan A and Loan B. Start with the loan amount, then the APR as a percentage, then the term in years. Finally, enter any upfront fees you expect to pay at the start, such as initiation fees, origination fees, or broker fees. When you click compare, you will see the monthly payment estimate, total interest over the term, total repayments excluding fees, and total cost including fees. The calculator then flags which loan is cheaper on total cost, and how much the difference is.

Monthly payment is important because it determines whether the loan fits your cash flow. Total interest matters because it reflects the “rent” you pay for using the lender’s money over time. Total cost including fees is often the best single summary number when you are comparing two offers with different fee structures. If your loan has optional add-ons like insurance, service fees, or account fees that apply monthly, treat those as part of your real cost, but note that this calculator only accepts a single upfront fee amount. If you have recurring fees, you can approximate by converting them to an upfront equivalent, or compare the core loan costs first and then add recurring costs manually.

Assumptions and how to use this calculator

• Assumes a fixed interest rate for the full term and equal monthly repayments.
• APR is treated as a nominal annual rate compounded monthly (APR ÷ 12 for the monthly rate).
• Upfront fees are added to total cost but do not change the payment calculation in this version.
• Does not include optional insurance premiums, monthly account fees, or penalty charges unless you approximate them separately.
• Results are estimates. Lenders can use slightly different rounding rules and fee timing.

Common questions

Which number should I compare first: monthly payment or total cost?

Start with monthly payment to confirm affordability, then compare total cost including fees to decide which offer is cheaper overall. A loan that is “cheaper” on total cost is still a bad choice if it breaks your monthly budget.

Why can a lower APR still be more expensive?

Fees and term length can outweigh a small rate advantage. If Loan B has a lower rate but high upfront fees, the total cost can end up higher, especially on shorter terms where you do not have enough time for the lower rate to “pay back” the extra fees.

Does a longer term always mean I pay more interest?

Usually yes, because you are borrowing for longer. A longer term lowers the monthly payment but increases total interest. A shorter term increases the monthly payment but typically reduces total interest and total cost.

What if my lender quotes an interest rate but not an APR?

In everyday usage, lenders often use “rate” and “APR” loosely. If the quote is a simple annual percentage rate for the loan and repayments are monthly, enter that value here. If your lender provides an APR that already accounts for some fees, be careful not to double count by also entering those fees as upfront fees in this calculator.

Should I include a deposit or down payment in the loan amount?

No. Enter only the amount you are actually borrowing. If you have a deposit, subtract it from the purchase price and use the remaining financed amount as the loan amount. This keeps the comparison focused on the borrowing cost.