Loan Comparison Tool
Compare up to 4 loans side by side. See monthly payments, total interest, and payoff times to understand which option fits you best.
Enter loan amounts, rates, and terms to see which loan offers the best value.
Comparing Loan Offers: Rate vs Term vs Total Cost
Two offers rarely match on rate and term at the same time. The dealer dangles 4.9% but stretches it to 72 months. Your credit union wants 5.5% over 48. Lower rate looks like the win until you total the interest: about $5,500 on the dealer loan against $4,100 at the credit union, so those two extra years cost you $1,400. The loan comparison tool sets up to four offers side by side and lines up monthly payment, total interest, and payoff date for each, because the cheapest row is almost never the one with the smallest rate or the smallest payment.
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. New to why two loans at the same rate can cost different amounts? The APR vs interest rate explainer covers that difference. Come back here to line up the specific offers.
What Matters When Choosing Between Loans
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.
Reading Two Offers Side by Side
A table is where a comparison earns its keep. Put the offers in one grid, line up every number that matters, and the cheapest option stops hiding behind a low rate or a low monthly payment. Sarah has two quotes on a $350,000 mortgage. Mike has two on a $28,000 car.
| Offer | Rate | Term | Fees | Monthly | Total interest |
|---|---|---|---|---|---|
| Sarah, Bank A | 6.5% | 30 yr | $3,500 | $2,212 | $443,800 |
| Sarah, Bank B | 6.25% | 15 yr | $4,000 | $3,007 | $191,260 |
| Mike, dealer | 3.9% | 72 mo | $0 | $437 | $3,464 |
| Mike, credit union | 4.5% | 48 mo | $0 | $636 | $2,528 |
Sarah's Bank B costs $795 more a month but $252,540 less in interest, and it hands her a paid-off house in 15 years instead of 30. If that payment runs tight, Bank A's lower required payment buys flexibility, since she can always send extra in the months she has it. Mike's rows tell a blunter story. The dealer's 3.9% looks like the winner next to the credit union's 4.5%, yet stretching to 72 months runs the meter two years longer, so he pays $936 more and stays underwater on the car well into the loan. If he can carry $636 a month, the credit union is the cheaper deal.
Comparison Mistakes That Cost You Money
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.
How the Comparison Works
Payments are calculated using standard amortization:
Payment = P × [r(1+r)^n] / [(1+r)^n - 1]
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.
Sources
- Consumer Financial Protection Bureau — Interest rate vs APR explained
- Federal Reserve G.19 Release — average consumer and auto loan finance rates, updated monthly (most recent July 2026)
Common Questions
Can I compare loans with different terms and amounts side by side?
Yes, and that's the whole point of a side-by-side view. Put a 48-month credit-union offer next to a 72-month dealer offer, or a $20,000 loan next to a $25,000 one, and the table lines up the monthly payment, total interest, and payoff date for each. A lower monthly payment on the longer term almost always hides a higher total cost, and seeing all four columns at once is what surfaces it. Compare the total you'll pay (principal plus interest plus fees), not the row with the smallest monthly number.
Should I only look at monthly payment?
No. Focusing only on monthly payment can be misleading. A lower monthly payment often comes from a longer term, which means you pay more interest over time. Consider both monthly payment and total cost to make an informed decision. If you can afford a higher payment, a shorter term usually saves money.
How do upfront fees change the calculation?
Upfront fees (like origination fees) add to your total cost. A loan with a lower APR but high fees might cost more than a loan with a slightly higher APR but no fees. Always compare the total cost including fees, not just the interest rate. Some fees can be rolled into the loan, which increases your principal and total interest.
What if I plan to pay extra each month?
Extra payments can significantly reduce your total interest and payoff time. When comparing loans, consider how extra payments affect each option. A loan with a higher rate might still be better if you plan to pay it off quickly with extra payments. Use the 'Extra Monthly Payment' field to see how this impacts each loan.
Is this financial advice?
No. This is an educational calculator to help you understand the numbers and trade-offs of different loan options. It does not provide personalized financial, tax, or legal advice. Always consult with a qualified financial advisor or loan officer for advice specific to your situation.
How accurate are these calculations?
The calculations use standard amortization formulas and assume fixed rates and consistent payments. They don't account for variable rates, payment changes, prepayment penalties, or other loan features. Use these results as estimates and verify with your lender. Actual loan terms may vary.
Which loan should I choose?
The best loan depends on your priorities: If you want the lowest total cost, choose the loan with the lowest total interest. If you need the lowest monthly payment, choose the loan with the lowest monthly payment. If you want to pay off quickly, choose the loan with the shortest term. Consider your financial situation, goals, and ability to make payments when deciding.
What if I can't decide between two loans?
If two loans are very close in total cost, consider other factors: lender reputation and customer service, flexibility for early payoff, prepayment penalties, loan features (e.g., rate locks, payment options), and your comfort level with the monthly payment. Sometimes the difference is small enough that other factors matter more.
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Educational tool. Results are estimates.
Educational only. Not individualized financial advice. Consult a qualified financial advisor.
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