Loan Comparison Calculator United States
This loan comparison calculator puts two offers side by side, with the monthly payment and total cost of each, and shows when a lower payment costs more.
What it does
The Loan Comparison Calculator puts two loan offers of the same amount side by side, showing the monthly payment and the total cost of each so you can see which one really costs less over its full term.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
monthly = P × i / (1 − (1 + i)^−n) where i = APR/12; total cost = monthly × n; difference = |total A − total B|
How it works
It amortizes each offer with the standard payment formula using the amount, APR and number of months you enter, then multiplies each monthly payment by its term to get the total cost, and reports the difference between the two totals.
Where it is used
- Choosing between a shorter loan and a lower monthly payment
- Checking whether a lower APR over a longer term actually costs less
- Comparing a dealer offer against a bank or credit union quote
Worked example
On a $10,000.00 loan, Loan A costs … a month and … in total, while Loan B costs … a month and … in total — a difference of ….
When two lenders offer the same amount, the one with the lower rate is not always cheaper. What you repay depends on both the rate and how long you take to repay it. This loan comparison calculator amortizes two offers of the same principal, shows the monthly payment and total cost of each, and reports the difference between them.
Why the monthly payment can mislead you
Most borrowers look first at the monthly payment, because that is what has to fit the budget. An offer with a longer term and a lower monthly payment can look better than a shorter loan that costs much less overall, since every extra month of repayment is another month of interest. Two loans can have the same monthly payment and very different total costs, or nearly the same rate and a total-cost gap of hundreds of dollars, purely because of the term. Comparing what each loan costs from the first payment to the last avoids that trap.
How the calculator works
For each offer you enter the loan amount, the APR and the term in months. The tool uses the standard amortization formula, which spreads principal and interest into equal monthly payments. For a loan of amount P at a monthly rate i over n months, the payment is P times i divided by one minus (1 + i) raised to the power of minus n. At a zero rate, the payment is the principal divided by the number of months. The monthly payment times the number of months is the total cost, and subtracting one total from the other gives the difference between the offers.
A worked example
Say you need to borrow $10,000. Loan A charges 6% APR over 36 months; Loan B charges 8% APR over 48 months. Loan A comes to about $304 a month and about $10,950 in total. Loan B lowers the monthly payment to about $244 but raises the total to about $11,720. The longer, higher-rate loan costs close to $770 more overall, even though its monthly payment is $60 lower. If cash flow is tight the smaller payment may still be worth it, and you will know what it costs.
Rate versus term
A loan has two levers. The rate sets how expensive each dollar of debt is, and the term sets how long you carry it. A lower rate always helps. A longer term lowers the monthly payment but almost always raises the total, because interest accrues over more months; a shorter term means a higher payment and a lower total. A borrower with a comfortable income should usually choose the shortest term they can afford, while someone on a tight monthly budget may accept a higher total for a payment they can reliably make. The calculator lets you test both levers at once.
Getting a fair comparison
Keep the loan amount the same and use each lender's APR, not the plain interest rate, since the APR includes certain fees. Enter the term as offered, converting years to months first. If one lender charges an origination fee and the other does not, the APR should reflect much of it, but read both disclosures so you are not comparing an offer loaded with fees against one without. With both offers entered on equal terms, compare the total cost.
Assumptions and limitations
This is a planning estimate, not a loan quote. It assumes a fixed rate and equal monthly payments over the whole term, which fits most auto loans, personal loans and fixed-rate mortgages but not variable-rate loans, interest-only periods or balloon payments. It does not add origination fees, credit insurance, prepayment penalties or late charges, and it ignores the time value of money beyond the interest in the schedule. Include known fees in the APR, confirm the exact terms with each lender, and use the result to shortlist offers before you sign.
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.
Frequently asked questions
How do I compare two loans fairly?
Can a loan with a lower interest rate still cost more?
What is the difference between APR and interest rate?
Why is my monthly payment lower but my total cost higher?
Does this calculator include fees or insurance?
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