Loan Comparison Calculator

Compare two loan offers side by side: monthly payment, total interest, and how much more one loan costs over its life.

Compare two loans by monthly payment, total interest, and total paid.

Loan A amount

Loan A interest rate

Loan A term (years)

years

Loan B amount

Loan B interest rate

Loan B term (years)

years

Loan A monthly payment

$494

Loan B monthly payment

$512

Interest difference

$1,071

Total payment difference

$1,071

Results are estimates for informational purposes only.

Loan A has the lower total paid based on the current inputs.

How to use this calculator

Compare total cost, not just the payment

Loan offers are usually advertised by monthly payment or interest rate, but the number that decides which loan is cheaper is the total you repay. A lower payment often comes from a longer term, and a longer term means paying interest for more months. This calculator runs a full amortization schedule for each loan and shows both payments, plus how much more (or less) Loan B costs than Loan A in interest.

In the default example, both loans are $25,000 over 5 years. Loan A at 6.9% costs $493.85 a month and Loan B at 8.4% costs $511.71. The $17.86 monthly gap looks small, but over 60 payments Loan B costs $1,071 more in interest.

When a lower payment costs more

Stretching a loan lowers the payment but raises the total. Keeping Loan B at 8.4% but extending it to 7 years drops its payment to $394.66, about $99 less than Loan A, yet it costs $3,520 more in interest. The reverse also holds: at 8.4% over 3 years, Loan B’s payment jumps to $788.03, but it costs $1,262 less in interest than Loan A because the balance is paid off sooner.

That makes the choice a trade-off between monthly cash flow and lifetime cost. If a higher payment would strain your budget, the longer loan may be the safer pick; it just helps to know exactly what that flexibility costs.

What to check before choosing

Compare loans for the same amount so the difference comes only from rate and term. If one lender charges an origination fee, add it to that loan’s amount when the fee is financed, or compare the APRs lenders must disclose, which fold most fees into the rate.

Also check for prepayment penalties. A loan you can pay off early without a fee lets you choose the longer term for a lower required payment and still pay it down faster when you can.

You can also review Loan Calculator and Auto Loan Calculator to compare scenarios.

Formula

Monthly payment = P × r ÷ (1 − (1 + r)^−n), where P is the loan amount, r the monthly rate, and n the number of payments
Total interest = monthly payment × n − P
Interest difference = Loan B total interest − Loan A total interest

Example: two $25,000 offers

Loan A: $25,000 at 6.9% for 5 years, a payment of $493.85.
Loan B: $25,000 at 8.4% for 5 years, a payment of $511.71.
Loan B costs $17.86 more each month and $1,071 more in total interest.
With equal terms and amounts, the lower rate wins; the table below shows how changing Loan B’s term changes that answer.

Loan B options compared with Loan A

Loan A is fixed at $25,000, 6.9%, and 5 years ($493.85 a month). Each row changes Loan B’s rate and term for the same $25,000. A positive interest difference means Loan B costs more.

Loan B interest rate	Loan B term (years)	Loan B monthly payment	Interest difference
8.4%	3 years	$788	-$1,262
8.4%	5 years	$512	$1,071
8.4%	7 years	$395	$3,520
6.4%	3 years	$765	-$2,088
6.9%	7 years	$376	$1,961
5.9%	7 years	$364	$946

Frequently asked questions

Is the loan with the lower interest rate always cheaper?

Only when the terms match. A lower rate over a longer term can still cost more in total interest. For example, $25,000 at 5.9% over 7 years costs $946 more in interest than $25,000 at 6.9% over 5 years, even though its rate is a full point lower.

Should I pick the lower payment or the lower total cost?

Choose the lower total cost if its payment fits comfortably in your budget with room left for savings. Choose the lower payment if a tight budget makes missed payments a real risk, since late fees and credit damage can cost more than the extra interest.

How do fees affect the comparison?

Fees raise the real cost of a loan without changing its interest rate. If an origination fee is added to the balance, include it in that loan’s amount here. Otherwise compare the APRs, which include most upfront fees.

Can I use this to evaluate a refinance?

Yes. Enter your current remaining balance, rate, and remaining term as Loan A and the refinance offer as Loan B. Count any closing costs on the new loan, and remember that restarting a longer term can raise total interest even at a lower rate.