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Loan Comparison Calculator
Have two loan offers and not sure which is better? Enter the amount, rate, term and fees for each, then press Compare to see monthly payments, total interest and the true lifetime cost side by side.
Written by TopicDrill Editorial Team·Updated June 2026
Verdict
Loan A costs less overall
Savings over the life of the loan: $997
Loan ACheaper
$489/mo
- Total interest
- $4,349
- Total cost (with fees)
- $29,649
Loan B
$413/mo
- Total interest
- $4,746
- Total cost (with fees)
- $30,646
Balance paid down over time
Loan A Loan B
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How the loan comparison calculator works
The tool amortizes each loan separately. It turns the annual rate into a monthly rate, works out the fixed payment that clears the balance over the chosen term, and tallies every dollar of interest along the way. It then adds any upfront fees so the final number reflects what each offer truly costs you from start to finish.
The chart traces how each balance falls month by month. A loan with a higher rate or a longer term pays down more slowly, and you can see the gap between the two payoff lines widen or close depending on which offer is stronger.
A quick example
Suppose you borrow $25,000. Offer A charges 6.5% over 5 years with $300 in fees, while Offer B charges 5.9% over 6 years with $900 in fees. Offer B has the lower payment and lower rate, but the extra year of interest plus the larger fee can push its total cost above Offer A. The verdict box tells you which one actually wins once everything is counted.
Things to keep in mind
Always compare loans on the same amount so the payments are apples to apples, and watch for prepayment penalties that are not captured by rate alone. The annual percentage rate is a useful single number that bundles many fees together; the CFPB explains rate versus APR. Once you have picked a loan, see the full breakdown with our loan interest calculator.
Frequently asked questions
Why is the cheaper monthly payment not always the better loan?
A lower monthly payment often comes from a longer term, which spreads the same debt over more months. You pay less each month but make more payments, so total interest can be far higher. This tool compares true lifetime cost, not just the monthly figure, so a smaller payment does not fool you.
How do upfront fees change the comparison?
Origination fees, points and processing charges are real money you pay to get the loan. The calculator adds them to the total of your payments to give a total cost figure. A loan with a slightly higher rate but no fees can sometimes win once fees are included.
What is the formula behind each payment?
Each loan uses the standard amortizing payment formula. The monthly payment equals the principal times the monthly rate times one plus the monthly rate raised to the number of months, divided by one plus the monthly rate raised to the number of months minus one. When the rate is zero the payment is simply the principal divided by the number of months.
Does this account for the time value of money?
The comparison sums the actual dollars paid over each loan, which is the most direct measure of cost. It does not discount future payments back to today. If you want to weigh paying more now against paying more later, treat the total cost as a starting point and consider what else you could do with the money.
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