Loan Comparison Tool

You're buying a car. The dealer offers 4.9% for 72 months. Your credit union offers 5.5% for 48 months. The dealer's rate is lower, so it must be better—right? Not necessarily. The loan comparison tool shows the dealer loan costs $5,500 in interest while the credit union loan costs $4,100. That "lower rate" actually costs you $1,400 more because you're paying interest for two extra years.

Comparing loans isn't as simple as picking the lowest rate. A longer term means more months of interest accumulating. A shorter term means higher payments but less total cost. Fees add to the upfront burden. This calculator puts up to four loan offers side by side so you can see monthly payment, total interest, and total cost for each.

The "best" loan depends on what you're optimizing for. Need the lowest monthly payment to fit your budget? Want to minimize what you pay over the life of the loan? Planning to pay extra and want to see how that changes things? Enter your numbers and let the math decide.

Monthly payment vs total cost: These often pull in opposite directions. A 30-year mortgage has lower payments than a 15-year, but you pay interest for twice as long. On a $300,000 loan at 6%, the 30-year costs $347,000 in interest; the 15-year costs $156,000. That's $191,000 difference.

APR tells more than interest rate: The interest rate is just the base cost. APR includes fees, expressed as an annual percentage. A 5.5% loan with $4,000 in fees might have a 5.8% APR, making it more expensive than a 5.7% loan with no fees. Always compare APRs.

How long you'll keep the loan: If you plan to sell the house or refinance in 5 years, a loan with higher fees and lower rate may never break even. The savings from the lower rate need time to offset the upfront cost.

Your ability to pay extra: If you can consistently pay $200 extra per month, a longer-term loan becomes more flexible—you get the low required payment but can accelerate payoff when cash allows.

Comparing rate only, ignoring APR: A loan at 5.5% with $5,000 in origination fees costs more than 5.75% with no fees. APR captures the total cost as an annual percentage. Always ask for APR, not just the interest rate.

Chasing the lowest payment: Stretching a loan to 72 or 84 months lowers the monthly number but inflates total interest dramatically. That "affordable" $400/month car payment might cost you $8,000 in interest instead of $4,000.

Ignoring prepayment penalties: Some loans charge fees if you pay off early. If you plan to make extra payments or refinance, verify there's no penalty—it could eat into your savings.

Not factoring in your timeline: Paying points to buy down your rate only makes sense if you keep the loan long enough. If $4,000 in points saves $80/month, breakeven is 50 months. Selling in 3 years means you lost money on the points.

Comparing different loan amounts: A $300,000 loan will always cost more than $250,000 regardless of rate. Make sure you're comparing the same principal amount across options.

Payments are calculated using standard amortization:

Where P = principal, r = monthly rate (APR ÷ 12), n = total payments. Example: $200,000 at 6% for 30 years = $1,199/month.

Total interest: (Monthly Payment × Number of Payments) - Principal. For the example above: ($1,199 × 360) - $200,000 = $231,640 in interest.

Assumptions: Fixed interest rate for the entire term, monthly compounding, no prepayment penalties, and fees paid upfront (not rolled into principal). If you enter extra monthly payments, the calculator reduces principal faster and recalculates the payoff timeline.