Loan Comparison Calculator

What the loan comparison calculator does

When two loans look similar, the headline interest rate makes them easy to rank, but the cost of borrowing depends on the rate, the fees, the amount and the term together. The loan comparison calculator combines them into a total cost for each loan, flags the cheaper one, and shows how much you would save by choosing it.

Why total cost matters more than the headline rate

Lenders compete hardest on the interest rate they advertise. Arrangement fees, booking fees, and other upfront charges are paid on top of the interest, and they do not shrink because the rate is low.

A loan with a rate half a percentage point lower can still be the more expensive option once a large arrangement fee is added. This is especially true on smaller loans and shorter terms, where there is less interest for a lower rate to save. Over five years on a modest balance, a few hundred in extra fees can outweigh the interest saved by a marginally better rate. Adding everything up is the only reliable way to know.

How the calculation works

For each loan, the tool works out the level monthly payment that clears the balance over the chosen term at the stated rate, using the standard amortising loan formula. It multiplies that payment by the number of months to get the total of all repayments and adds the upfront fees.

That gives the lifetime cost of each loan: every payment plus every fee. The calculator compares the two totals and reports the cheaper loan and the difference. Because both loans use the same term, the comparison isolates the effect of rate, amount and fees.

What moves the result

• A higher interest rate raises every monthly payment across the whole term. On longer terms, even a small rate gap becomes a large sum, because it applies to more interest.
• Fees are a flat cost added once. They matter most on small loans and short terms, where they form a bigger share of the total, and least on large, long loans where interest dominates.
• The term is the same for both loans, but its length still shapes the totals. A longer term means more payments and more total interest, which magnifies any rate difference between the two offers.

How to use the calculator

1. Enter the amount, interest rate and upfront fees for Loan A.
2. Enter the same three details for Loan B.
3. Enter the loan term in years, shared by both.

The calculator shows the total cost of each loan, which is cheaper, and the saving. Adjust one figure at a time. If the cheaper loan changes when you shave a fee or raise a rate, the offers are close and the small print matters. If one loan stays ahead across a wide range, the choice is clear.

Caveats

The calculation assumes fixed rates for the whole term. If either loan has a variable or introductory rate, the cost can drift from the estimate as the rate changes. It also assumes you run each loan to the end without overpaying; if you expect to repay early, a loan with lower fees and a higher rate can be more attractive than the full-term total suggests.

Check the official APR and the complete fee schedule on any formal offer, since lenders may include charges a quick comparison misses. Use the calculator to shortlist and to see the trade-off between rate and fees, then confirm against the lender's own figures. In general, fees dominate small, short loans and rates dominate large, long ones.

This article is general information only and is not financial advice.

About This Loan Comparison Calculator

Use this loan comparison calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.