Finance
Loan Comparison Calculator
The cheaper loan is the one with the lowest total cost — lifetime interest plus upfront fees — not the lowest monthly payment. Enter two offers to see payment, total interest, total cost and the true APR of each, side by side.
The two offers
Loan A
$
%
yr
$
Loan B
$
%
yr
$
The cheaper loan overall
Loan A saves $13,103
Loan A costs $13,103 less over its life once fees and interest are counted. The monthly payments differ by $53.06.
| Measure | Loan A | Loan B |
|---|---|---|
| Monthly payment | $1,264.14 | $1,317.20 |
| Total interest | $255,089 | $274,192 |
| Upfront fees | $6,000 | $0 |
| Total cost (interest + fees) | $261,089 | $274,192 |
| Effective APR | 6.80% | 6.90% |
Estimate only. Total cost assumes each loan is kept for its full term; if you repay early, a lower rate matters more and upfront fees matter less.
Try a scenario
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The basics
What makes one loan cheaper than another
A loan has two costs that pull in different directions — the fees you pay once and the interest you pay every month. Two ideas cut through it.
total cost = interest + fees
Compare total cost, not payment
The monthly payment is easy to see but misleading — a longer term or hidden fees can make a low payment the pricier loan. Total cost is the honest number.
A $261,089 vs B $274,192 → Loan A cheaper by $13,103
APR folds fees into the rate
APR lines two offers up
The effective APR turns rate plus fees into one annual number. When two APRs are close, the loan with the lower total cost still wins.
A 6.50% rate → 6.80% APR; B 6.90%, no fees
Method
How to compare two loans by hand
Four steps turn two sets of terms into a clear winner.
- 1
Find each monthly payment
Each loan’s payment comes from the level-payment formula on its own amount, rate and term. The payment alone does not tell you which is cheaper.
A $1,264.14/mo · B $1,317.20/mo - 2
Add up the lifetime interest
Multiply the payment by the number of months and subtract the amount borrowed. That is the interest each loan charges over its life.
A $255,089 · B $274,192 of interest - 3
Add the upfront fees for total cost
Total cost is lifetime interest plus every upfront fee. This is the one number that makes two offers truly comparable.
A $255,089 + $6,000 = $261,089 - 4
Compare — lowest total cost wins
The cheaper loan is the one with the smaller total cost. The effective APR says the same thing as a single rate you can line up side by side.
$274,192 − $261,089 = $13,103 saved
Worked example
Lower rate with fees vs higher rate with none
Two $200,000 loans over 30 years. Loan A trades $6,000 of fees for a 6.50% rate; Loan B has no fees but a 6.90% rate.
| Measure | Loan A · 6.50% + $6,000 | Loan B · 6.90%, no fees |
|---|---|---|
| Monthly payment | $1,264.14 | $1,317.20 |
| Total interest | $255,089 | $274,192 |
| Total cost | $261,089 | $274,192 |
| Effective APR | 6.80% | 6.90% |
Kept to term, Loan A costs $13,103 less — the lower rate more than pays back its $6,000 of fees over 30 years.
Where it shows up
When you are choosing between offers
Three everyday moments where two numbers need lining up.
two mortgage quotes
Shopping a mortgage
Lenders quote rate and points differently. Total cost and APR tell you which quote is really the cheapest for how long you will stay.
Rate + points vs a no-cost loan
dealer vs bank
Financing a car
A dealer’s rate and a bank’s rate rarely match. Drop both in to see the lifetime difference before you sign at the desk.
Dealer offer vs your bank
refi break-even
Weighing a refinance
A refinance is just a new loan. Compare its total cost, fees included, against staying put to see if the switch is worth it.
New loan cost vs the old one
Reference
What each number tells you
Four figures, and the job each one does when you compare loans.
| Figure | What it measures | Use it to |
|---|---|---|
| Monthly payment | Cash out of pocket each month | Check it fits your budget |
| Total interest | Interest over the loan’s life | See the cost of the rate and term |
| Total cost | Interest plus upfront fees | Pick the genuinely cheaper loan |
| Effective APR | Rate with fees folded in | Line two offers up on one number |
Worth knowing
Things that change the winner
None show up in the rate alone, and each can flip which loan is cheaper.
how long you keep it
Time changes everything
Fees are a one-time cost; the rate compounds for years. The longer you hold the loan, the more a lower rate outweighs an upfront fee.
points buy the rate down
Discount points
Paying points is a fee that lowers the rate. Whether it pays off is exactly the total-cost question this calculator answers.
term hides in the payment
Beware the longer term
A smaller payment is often just a longer loan. Always check the total cost, not the payment, when the terms differ.
APR assumes full term
APR has an assumption
The APR is figured as if you keep the loan to the end. Repay early and the true cost of a fee-heavy loan is higher than its APR suggests.
compare like with like
Same type, same purpose
Compare a mortgage to a mortgage and an auto loan to an auto loan. Mixing loan types muddies the fees and the terms.
prepayment penalties
Check the fine print
Some loans charge a fee to pay off early. If you might, factor that in — it can erase the saving from a lower rate.
Quick chart
Monthly payment, by rate and term
Pick a loan amount and read the monthly payment at every rate and term — a fast way to sanity-check an offer before you compare it above.
Loan amount
Show
Monthly payment on $20,000, by rate and term.
| Rate | 3 years | 5 years | 7 years | 30 years |
|---|---|---|---|---|
| 5.00% | $599 | $377 | $283 | $107 |
| 5.50% | $604 | $382 | $287 | $114 |
| 6.00% | $608 | $387 | $292 | $120 |
| 6.50% | $613 | $391 | $297 | $126 |
| 7.00% | $618 | $396 | $302 | $133 |
| 7.50% | $622 | $401 | $307 | $140 |
| 8.00% | $627 | $406 | $312 | $147 |
| 8.50% | $631 | $410 | $317 | $154 |
| 9.00% | $636 | $415 | $322 | $161 |
Monthly payment only. Add each loan's fees and compare total cost in the calculator above for the true winner.
How we calculate this
The formulas and our assumptions
Payment and interest use the standard amortizing-loan math; the APR is solved to match the cash received.
total cost = interest + fees
The comparison basis
Lifetime interest is the payment times the number of months, less the amount borrowed. Add the upfront fees and you have the total cost — the figure we rank on.
net = M·(1 − (1 + a)^−n) ÷ a
Solving the APR
The effective monthly rate a is the one that discounts the payment stream back to the cash actually received (loan minus fees). We solve it by bisection and report a × 12.
- Both loans are fixed-rate and fully amortizing.
- Total cost assumes each loan is held for its full term.
- Fees are treated as paid up front and reduce the cash received when solving the APR.
- Taxes, insurance and any prepayment penalty are not included.
Where to get a loan
Where to gather offers to compare
Rows are ordered by borrower fit, not by any payout — the source that suits you comes first. Rates are described as ranges only; get exact quotes to drop into the calculator.
| Source | Example | Best for | Notes |
|---|---|---|---|
| Compare several quotes | Marketplaces (LendingTree, Credible) | Seeing the real spread quickly | One application returns multiple offers, so you have real numbers to drop into this calculator. |
| Online lender | Direct fintech lenders | Fast personal and auto loans | Often low or no fees and quick funding — check the APR, not just the rate. |
| Bank or credit union | Your existing institution | Relationship discounts | Members and long-time customers may get lower fees or a rate cut worth comparing here. |
| Broker | Independent loan broker | Complex or larger loans | Shops many lenders for you; confirm how the broker is paid, as it can show up as a fee. |
CalculateThis.io is not a lender and does not make credit decisions. When we add partner links they will be marked as sponsored, and we may earn a commission if you apply through one — it does not change the rate you are offered.
Sources
Where the method comes from
- Truth in Lending Act (Reg Z) — the definition of APR and the finance charge.
- Consumer Financial Protection Bureau — comparing loan offers and reading the Loan Estimate.
- Standard amortization formula for a fixed-rate, fully amortizing loan.
FAQ
Common questions
Do not compare monthly payments — compare total cost, which is lifetime interest plus every upfront fee. On two $200,000 loans, Loan A at 6.50% with $6,000 in fees costs $261,089 over 30 years, while Loan B at 6.90% with no fees costs $274,192. Loan A is cheaper by $13,103, even though its payment differs by $53.06.
It depends on how long you keep the loan. Fees are paid once, up front; the rate is paid every month for the life of the loan. Over a full 30-year term a small rate cut usually beats the fee — here Loan A wins by $13,103. But if you sell or refinance in a few years, you may never recover the fee, and the no-fee loan wins. The total-cost figure assumes you keep the loan to term.
The interest rate sets your monthly payment. The APR folds the upfront fees into an annual rate, so it reflects the true cost of borrowing. That is why Loan A’s 6.50% rate carries a higher 6.80% APR once its fees are counted, while Loan B’s rate and APR are both 6.90% because it has no fees. Comparing APRs is the fastest way to line up two offers.
No — a lower payment often just means a longer term, which piles on interest. A 30-year loan has a smaller payment than a 15-year loan of the same size, but costs far more overall. Compare the total cost and the APR, then check the payment fits your budget. The cheapest loan and the smallest payment are rarely the same loan.
Not necessarily. A fee that buys a lower rate — discount points, for example — can save more in interest than it costs, if you keep the loan long enough. The break-even is when the interest saved equals the fee. This calculator handles it automatically: the total cost already includes the fees, so the cheaper loan is the cheaper loan.
Yes. Any fixed-rate, fully amortizing loan uses the same math — a level monthly payment that pays the balance to zero. Enter the amount, rate, term and fees for each offer, whether it is a mortgage, a car loan or a personal loan. Just compare loans of the same type and purpose so the terms are apples to apples.
The calculator still compares total cost, which is the fair basis — but read it with care. A shorter term costs less overall yet demands a bigger monthly payment. If you are choosing between terms, weigh the total-cost saving against whether the higher payment fits your budget every month.
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Ugo CharlesBuilt and fact-checked against our editorial standards · Last updated June 2026
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