Loan Comparison Calculator
Compare two loans side by side — monthly payment, total interest and total cost — to see which is cheaper overall.
How it works
For each loan: M = P × i ÷ (1 − (1 + i)^−n), total cost = M × n, total interest = total cost − P
The cheapest monthly payment is not always the cheapest loan. A lower rate helps, but a longer term lowers the payment while stretching interest over more months — often raising the total you pay. This tool computes each loan’s payment and total cost so you compare on the number that matters: lifetime cost. Watch for a longer term quietly making a "cheaper" monthly payment more expensive overall.
Worked example
Loan A: $25,000 at 6% for 60 months → about $483.32/month, roughly $3,999 total interest. Loan B: $25,000 at 5% for 72 months → about $402.56/month, roughly $3,984 total interest. Loan B’s payment is $81 lower, yet its total cost is nearly the same — the longer term almost cancels out the lower rate.
Frequently asked questions
Should I pick the lower monthly payment?
Only if cash flow is the priority. A lower payment from a longer term usually means more total interest. If you can afford the higher payment, the shorter, cheaper-overall loan saves money.
Does this account for fees or APR?
No — it compares on the note rate and term. If the loans have different upfront fees, compare their APRs too, or add the fees to see the real cost. Use the APR calculator for that.
What if the loan amounts differ?
The tool still compares total cost, which is valid, but a fair rate comparison assumes similar amounts. Different amounts mean you are also comparing how much you borrow, not just the terms.
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This is an educational estimate, not financial advice. Lenders use their own rounding, fees and terms — confirm exact figures with your lender or a licensed advisor.