Loan Comparison Calculator
Compare two loan options side by side.
Results update as you type.
How it works
Choosing between two loan offers means weighing the monthly payment against the total cost, and this calculator compares them directly. You enter one loan amount and two options, each with its own interest rate and term, and it returns the monthly payment for each and the difference in total cost. Each payment is the standard amortizing payment for that rate and term, and the total cost is that payment multiplied by the number of months. The comparison often reveals a crucial trade-off: a loan with a longer term or lower rate may have a smaller monthly payment yet cost more or less overall depending on how the rate and term combine. A longer term lowers the monthly payment but usually increases total interest, while a lower rate reduces both. Looking only at the monthly payment can be misleading, because a comfortable payment might hide a much larger total cost. This calculator lets you see both dimensions so you can choose based on your priorities, whether that is minimizing monthly outlay for cash flow or minimizing total interest to save money. Use it for mortgages, auto loans, student loans, or personal loans whenever you have two offers to weigh. The total cost difference is option two minus option one, so a positive number means option two costs more overall. Enter the loan amount and both options to compare them.
Payment = P × r / (1 − (1 + r)^−n) for each option
For the same loan amount, each option's monthly payment is computed with the amortization formula using its own rate and term. The total cost of each is the payment times the number of months. The difference in total cost shows which option is cheaper overall, which is not always the one with the lower monthly payment.
Source:Loan amortization
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter loan amount, option 1 — rate, option 1 — term, option 2 — rate and option 2 — term.
- 2
Adjust the options
Fine-tune any options to match your situation.
- 3
Read your result
Option 1 monthly payment updates instantly as you type — no button to press.
Frequently asked questions
How do I compare two loans?
Compute each loan's monthly payment from its rate and term for the same loan amount, then multiply by the number of months to get the total cost. Compare both the monthly payments and the total costs. The calculator does this for two options, showing the payments and the difference in total cost between them.
Should I choose the lower monthly payment?
Not always. A lower monthly payment, often from a longer term, can mean paying more total interest over the life of the loan. If cash flow is tight, a lower payment helps, but if your goal is to minimize cost, the option with the lower total cost is better even if its monthly payment is higher. Weigh both.
How does the term affect the comparison?
A longer term spreads the loan over more payments, lowering each monthly payment but typically increasing total interest because you owe money for longer. A shorter term raises the monthly payment but reduces total interest. This is why comparing total cost, not just the monthly payment, is essential when the terms differ.
What does the total cost difference mean?
The total cost difference is option two's total cost minus option one's. A positive value means option two costs more overall, and a negative value means it costs less. This single number tells you which loan is cheaper across its full term, complementing the monthly payment comparison.
Can I use this for different loan types?
Yes, it works for any fixed-rate amortizing loan, including mortgages, auto loans, student loans, and personal loans. Just enter the same loan amount and the two rate-and-term options you are comparing. For offers with different amounts or fees, factor those in separately, since this compares the same principal.