Loan Comparison Calculator

Compare two loan offers side by side. See monthly payments, total interest, effective APR, and total cost to determine which loan saves you the most money.

Loan A

$
%
%

Loan B

$
%
%

Enter details for both loans

Get a complete side-by-side comparison with effective APR

Related Calculators

Pro Tip

Get pre-approved from at least 3 lenders before making a decision. Rate shopping within a 14-day window counts as a single credit inquiry.

Use the Loan Calculator →

Popular Tools

How to Compare Loan Offers

When shopping for a loan, comparing offers can be confusing because lenders present information differently. One may offer a lower interest rate but higher fees, while another has a higher rate but no fees. This calculator helps you cut through the noise by computing the true cost of each loan.

The most important metric for comparison is the effective APR (Annual Percentage Rate), which combines the interest rate with any fees into a single number representing the true annual cost of borrowing. By federal law, lenders must disclose the APR, but calculating it yourself ensures accuracy.

Beyond APR, consider the total cost of the loan over its full term. A loan with a lower APR but longer term may cost more in total than a higher-APR loan with a shorter term. For example, a $30,000 loan at 5.9% for 7 years costs about $6,700 in interest, while the same loan at 6.5% for 5 years costs about $5,200 -- lower total cost despite the higher rate.

Monthly payment differences matter for budgeting but should not be the sole deciding factor. A lower monthly payment often means a longer term and more total interest. Focus on the total cost unless cash flow is your primary concern.

When comparing, always use the same loan amount for both options. If you need to compare loans with different amounts (e.g., one includes fees in the balance), adjust accordingly. This calculator accounts for origination fees by computing the effective APR on the net amount received.

Key Comparison Metrics

Effective APR Calculation

APR = rate where PV(payments) = Amount − Fees

Where:

APR = Annual Percentage Rate including all fees

PV = Present value of all monthly payments

Amount = Stated loan amount

Fees = Origination fee or other upfront costs

Example

Loan A: $30,000 at 6.5% for 5 years, 1% fee vs. Loan B: $30,000 at 5.9% for 7 years, 3% fee

  • • Loan A: Monthly payment = $587.02, Total interest = $5,221, Fee = $300, Total cost = $5,521
  • • Loan B: Monthly payment = $441.05, Total interest = $7,048, Fee = $900, Total cost = $7,948
  • • Loan A effective APR = ~6.73% (rate + fee impact over shorter term)
  • • Loan B effective APR = ~6.79% (rate + fee impact over longer term)
  • • Loan A saves $2,427 total despite higher stated rate

Frequently Asked Questions

Why is APR more important than interest rate?
APR includes both the interest rate and fees, giving you the true cost of borrowing. A loan at 5.5% with a 5% origination fee may have a higher APR than a 6.5% loan with no fees. Always compare APR, not just the stated rate.
Should I always choose the lower monthly payment?
Not necessarily. A lower monthly payment usually means a longer term, which increases total interest. If you can afford the higher payment, a shorter-term loan almost always costs less overall. Consider both your monthly budget and total cost.
How do origination fees affect the comparison?
Origination fees reduce the net amount you receive while you still repay the full loan amount plus interest. This effectively increases your borrowing cost. The effective APR captures this difference, making it the best metric for comparison.
What if the loan amounts are different?
When loan amounts differ, compare the total cost as a percentage of the amount borrowed, or use the effective APR. A larger loan at a slightly lower rate may still cost more in absolute terms.