OneTaskBy Tim King · Updated
Loan Comparison Calculator
See Which Loan Offer Is Cheaper by Payment, Interest and Fees
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How the Loan Comparison Calculator works
This loan comparison calculator puts two offers side by side. Enter the amount you need, then each loan's rate, term and upfront fees, to see both monthly payments, the interest and fees on each, and which loan costs less in total once everything is added up.
Loan comparison calculator formula
Each loan's payment uses the amortization formula, Payment = amount × r ÷ (1 − (1 + r)^−n). The loan comparison calculator then totals the cost of borrowing:
Cost of loan = payment × months − amount + fees
The loan with the lower cost is cheaper overall, even if its monthly payment is higher. A low rate with high fees can lose to a slightly higher rate with none, especially on small or short loans.
Worked example: rate versus fees
Borrow 20,000 over 5 years. Loan A is 7% with no fees: 396.02 a month and 3,761.44 of interest. Loan B is 6% with 800 of fees: 386.66 a month, 3,199.36 of interest, 3,999.36 in total. Loan A is cheaper by 237.92 despite the higher rate.
Worked example: short term versus long term
The same 20,000 at 7% over 3 years costs 617.54 a month and 2,231.51 of interest; over 7 years it is 301.85 a month and 5,355.70. The 3-year loan is 3,124.19 cheaper, but asks how many extra pounds or dollars a month you can afford.
Loan comparison reference table
Total interest on a 20,000 loan at rates from 4% to 15%, over 3, 5 and 7 years.
| Rate | 3 years | 5 years | 7 years |
|---|---|---|---|
| 4.0% | 1,257.27 | 2,099.83 | 2,963.59 |
| 4.5% | 1,417.79 | 2,371.62 | 3,352.27 |
| 5.0% | 1,579.05 | 2,645.48 | 3,744.97 |
| 5.5% | 1,741.05 | 2,921.39 | 4,141.67 |
| 6.0% | 1,903.79 | 3,199.36 | 4,542.37 |
| 6.5% | 2,067.28 | 3,479.38 | 4,947.05 |
| 7.0% | 2,231.51 | 3,761.44 | 5,355.70 |
| 7.5% | 2,396.48 | 4,045.54 | 5,768.30 |
| 8.0% | 2,562.18 | 4,331.67 | 6,184.84 |
| 8.5% | 2,728.63 | 4,619.84 | 6,605.30 |
| 9.0% | 2,895.81 | 4,910.03 | 7,029.65 |
| 9.5% | 3,063.72 | 5,202.23 | 7,457.89 |
| 10.0% | 3,232.37 | 5,496.45 | 7,889.99 |
| 10.5% | 3,401.76 | 5,792.68 | 8,325.93 |
| 11.0% | 3,571.88 | 6,090.91 | 8,765.69 |
| 11.5% | 3,742.72 | 6,391.13 | 9,209.25 |
| 12.0% | 3,914.30 | 6,693.34 | 9,656.59 |
| 12.5% | 4,086.61 | 6,997.53 | 10,107.68 |
| 13.0% | 4,259.65 | 7,303.69 | 10,562.50 |
| 13.5% | 4,433.41 | 7,611.82 | 11,021.02 |
| 14.0% | 4,607.89 | 7,921.90 | 11,483.22 |
| 14.5% | 4,783.10 | 8,233.94 | 11,949.07 |
| 15.0% | 4,959.04 | 8,547.92 | 12,418.55 |
Quick answers
- Compare total cost, not just the rate or the payment.
- Upfront fees matter more on small and short loans.
- A longer term lowers the payment and raises total interest.
- On 20,000 over 5 years, each extra 1% of rate costs about 550.
- Fees added to the loan balance should be entered as fees here.
FAQ
Should I choose the loan with the lowest monthly payment?
Only if the payment is what limits you. The lowest payment usually comes from the longest term, which costs the most in total. If you can afford a higher payment, the shorter loan normally saves money.
How do I compare loans with different terms?
Look at the total cost line, which adds all interest and fees. It shows the true price of borrowing the same amount, whatever the term. Then check the monthly payment fits your budget before deciding.
Why is the advertised APR different from the rate here?
Regulated APRs often include some fees, so they already combine rate and cost. This calculator separates them: enter the interest rate as the rate and the fees as fees, which gives a clearer view of each part.
What if one loan has a variable rate?
The calculator assumes the rate stays fixed for the whole term. For a variable loan, try a few rates to see how the comparison changes if rates rise, and treat the result as a scenario rather than a forecast.
See also: all Debt tools, Pay, Bills, Property, Investing, Saving.
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