How the Loan Comparison Calculator works
Two loan offers can look similar on paper but cost very different amounts once you run the full numbers. This calculator computes the fixed monthly payment and full amortization schedule for each loan independently, using the same standard formula applied twice — once for Loan A and once for Loan B.
Comparing the resulting monthly payments side by side is useful, but the total cost over the full term — all payments added together — is usually the more important number, since it captures the effect of both the rate and the term.
The "you save" figure below highlights the difference in total cost between the two loans, so you can see at a glance which offer is actually cheaper once every payment is accounted for.
A worked example
Offer A is $20,000 at 6% over 5 years: payment $386.66, total interest $3,199.36. Offer B is $20,000 at 5% over 4 years: payment $460.59, total interest $2,108.12.
| Offer A | Offer B | |
|---|---|---|
| Monthly payment | $386.66 | $460.59 |
| Total interest | $3,199.36 | $2,108.12 |
| Total repaid | $23,199.36 | $22,108.12 |
Offer B costs $74 more per month but $1,091 less overall and frees you a year sooner. Which wins depends on whether your budget can absorb the higher payment.
How to read your results
Compare three things at once: the monthly payment (does it fit your budget?), the total interest (what does the loan cost?), and the payoff time (how long are you committed?). The cheapest loan overall is not always the right one if the payment is a stretch.
When to use this calculator
Use it whenever you have two real offers — different rates, terms, or fees — and need a side-by-side that reduces them to comparable numbers. It is the fastest way to see past a low advertised rate that comes with a short, high-payment term.
Common mistakes to avoid
- Comparing loans of different amounts. Match the principal, or the interest totals are not comparable.
- Leaving fees out of one side. Add each loan's origination fee, or compare by APR.
- Picking by payment alone. That systematically favors longer, more expensive loans.
- Ignoring flexibility. A slightly costlier loan with no prepayment penalty may be worth it if you plan to pay early.