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Loan Calculators

Loan Comparison Calculator

Compare two loan offers side by side — monthly payment, total interest, total cost including fees, and effective APR.

Effective APR is computed from amount, rate, term, and fees the way Regulation Z requires.

Loan A
$
%
yr
$
Loan B
$
%
yr
$
Verdict
Loan A
Loan A is cheaper overall by $256.
Loan A
$495 / mo
Total interest
$4,702
Total cost (incl. fees)
$30,002
Effective APR
7.51%
Loan B
$420 / mo
Total interest
$5,258
Total cost (incl. fees)
$30,258
Effective APR
6.50%
Overview

How the Loan Comparison Calculator Works

Two loan offers rarely look alike on paper. One has a lower rate but higher fees; the other a shorter term but a bigger monthly. This calculator lays both loans out side by side so the cheaper option is obvious — by monthly payment, by total cost, and by effective APR.

Formula

The Math Behind the Calculator

For each loan: Monthly = P × r / (1 − (1 + r)^−n). Total cost = (Monthly × n) + Fees. Effective APR solves for the rate that turns the net disbursed (amount − fees) into the same monthly payment.

Example

A Worked Example

Loan A: $25,000 at 7.00% over 5 years, $300 fee → monthly $495, total cost $30,008, APR 7.49%. Loan B: $25,000 at 6.50% over 6 years, $0 fee → monthly $420, total cost $30,222, APR 6.50%. A has a higher monthly but is cheaper overall by $214 — though B's lower APR and smaller monthly may still win for cash flow.

How to use

How to Use the Loan Comparison Calculator

  1. 1Enter the loan amount, rate, term, and fees for Offer A.
  2. 2Enter the same fields for Offer B.
  3. 3Compare monthly payment, total cost, and APR side by side.
  4. 4Pick based on the combination of monthly affordability and total cost that fits your goals.
Interpretation

What the Results Mean

  • Lower monthly payment helps cash flow but usually means a longer term and more total interest.
  • Lower total cost is the most honest measure of which loan is cheaper, assuming you keep it to maturity.
  • Effective APR is the best single-number comparison when fees differ.
Avoid

Common Mistakes to Avoid

  • Picking the loan with the lower monthly payment without checking the total cost.
  • Ignoring fees because they're rolled into the loan instead of paid upfront.
  • Comparing loans with different terms by total interest alone — APR normalizes for term length.
Keep going

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FAQ

Frequently Asked Questions

Which loan should I pick?+

If you can comfortably afford either monthly payment, pick the lower total cost or lower APR. If cash flow is tight, the lower monthly payment may win even at higher total cost.

Do I have to compare the same loan type?+

No — you can compare any two offers (e.g. a 5-year auto loan vs a 7-year), but be aware that longer terms always have a lower monthly and usually higher total interest.

What counts as a 'fee'?+

Origination fees, discount points, document fees, and any upfront cost paid to the lender. Third-party costs like appraisals are usually excluded from APR.

Financial Disclaimer

This calculator is for educational and estimation purposes only. It does not provide financial, mortgage, tax, investment, or legal advice. Actual rates, payments, taxes, fees, insurance costs, eligibility, and loan terms vary by lender, location, credit profile, and market conditions. Always compare official offers and consult a qualified professional before making financial decisions.

Last updated June 2026 · Prepared by the mCalculator Editorial Team