Loan Comparison Calculator
Compare two loan offers side by side — payment, total interest and total cost.
A worked example
Running this tool on current national benchmarks (Federal Reserve / Freddie Mac via FRED (St. Louis Fed)) — swap in your own numbers to see how the result moves.
- Loan amount
- $25,000
- Loan A — rate
- 6.50%
- Loan A — term (years)
- 5
- Loan B — rate
- 7.90%
- Loan B — term (years)
- 4
saves $110 versus the other offer
- Loan A payment$489.15
- Loan A total interest$4,349
- Loan B payment$609.15
The math behind it
The calculator fully amortizes two loan offers on the same principal, each with its own rate and term. For each, it computes the monthly payment, total interest and total of all payments. It then picks the offer with the lower total cost and reports how much it saves against the other. Because term and rate both move, the cheaper monthly payment is not always the cheaper loan — a longer term can lower the payment while raising total interest.
Assumptions & limits
- Both loans are compared on the same loan amount.
- Each loan is a fixed-rate amortizing loan over its own term.
- The winner is chosen on total cost — total of all payments — not on the monthly payment alone.
- Fees, points and insurance are excluded; only principal and interest are compared.
Common questions
Why can the loan with the lower payment still cost more?
A lower monthly payment often comes from a longer term, which means you borrow the money for more months and accrue more interest overall. This calculator ranks the offers by total cost, not payment size, so a loan that feels cheaper each month can lose once you add up every payment.
Should I compare loans on rate or on total interest?
Total interest — and total cost — because rate alone ignores the term. A slightly higher rate over a much shorter term can beat a low rate stretched over many years. The tool shows both loans' total interest side by side so you compare the full picture.
What isn't included in this comparison?
Origination fees, points, and any insurance or add-ons. Those can change which loan is genuinely cheaper, especially between a low-rate loan with a fee and a higher-rate loan without. Add each offer's fees to its total cost before deciding.