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Loan Comparison Calculator

Compare two loans side by side on monthly payment and total interest.

Runs in your browser — files never leave your device

Loan A

Monthly
$396.02
Total interest
$3,761.44

Loan B

Monthly
$331.46
Total interest
$3,864.96
Cheaper overall
Loan A by $103.52

How it works

This tool compares two loan offers for the same borrowed amount side by side. Enter the principal once, then a rate and term for Loan A and for Loan B. For each offer it shows the monthly payment and the total interest, and a final Cheaper overall line tells you which loan costs less across its full term — and by exactly how much.

Each loan is computed with the standard amortization formula: payment = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1), where P is the amount borrowed, r is that loan’s monthly rate (annual rate ÷ 12 ÷ 100), and n is its number of monthly payments (years × 12). The total paid is the payment times the number of months, total interest is that total minus the principal, and the verdict simply compares the two totals. All results are rounded to the cent.

A fully worked example using the defaults: borrow $20,000, with Loan A at 7% for 5 years and Loan B at 6% for 6 years. Loan A costs $396.02 a month and $3,761.44 in interest, for a total of $23,761.44. Loan B costs $331.46 a month — $64.56 less — but runs a year longer, so interest reaches $3,864.96 and the total is $23,864.96. The verdict: Loan A is cheaper overall by $103.52 despite its higher rate and higher payment.

That example is the main trap this tool exposes: a lower rate or a lower payment does not mean a cheaper loan when the term is longer, because interest accrues for more months. When the offers carry different fees, enter each lender’s APR rather than the bare rate so the fees are reflected. The comparison covers principal and interest only — taxes, insurance, and charges paid outside the loan are not included — and it assumes both offers are fixed-rate loans for the same amount.

Frequently asked questions

How does it decide which loan is cheaper?
It computes each loan’s payment with the amortization formula, multiplies by the number of months to get the total paid, and compares the two totals. The “Cheaper overall” line names the loan with the lower total and shows the difference in dollars.
Why can the loan with the lower rate cost more?
Because the term matters as much as the rate. In the default example, 6% over 6 years has a $64.56 lower monthly payment than 7% over 5 years, yet costs $103.52 more in total — the extra year of interest outweighs the whole percentage point of rate. Always compare total cost, not just the rate or the payment.
Should I enter each lender’s rate or APR?
Use the APR when the offers carry different fees — it folds origination and other mandatory charges into a single comparable rate. Comparing one lender’s bare rate against another’s APR will bias the result toward the lender hiding costs in fees.
What if the two offers are for different amounts?
This tool assumes the same principal for both, which is the right way to compare rates and terms in isolation. If the offers genuinely differ in amount — say one lender rolls its fee into the balance — model each one in a standalone loan calculator and compare the totals yourself.
Should I pick the lower monthly payment or the lower total cost?
It depends on your cash flow. The lower total is the better deal on paper, but a payment that strains your budget invites missed payments and fees. One middle path: if the longer loan has no prepayment penalty, take it for flexibility and pay it on the shorter loan’s schedule.
Is my data uploaded?
No — the comparison runs entirely in your browser and nothing you enter leaves your device.

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