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Loan comparison calculator

Two fully amortizing loans, one difference in interest

A loan comparison calculator answers which offer costs more interest, not which advertisement has the lower rate. A lower rate on a longer term can still cost more over the life of the loan. Enter principal, APR, and term for two loans. The page computes each fully amortizing payment and the interest each loan would collect if you paid it as agreed.

Inputs

Loan A
Loan B

Result

Enter both loans to compare interest.

Disclaimer: An estimate of two fixed-rate installment loans. Fees, points, and prepayment are not included. Not a credit decision.

Two shelf prices are not two loans. Take a percent off first with the ClearQuip discount calculator, then finance the result.

How to use

  1. Enter loan A’s principal, APR, and term in months. Use the amount you would actually finance, after any down payment.
  2. Enter loan B the same way. The principals can differ if one offer finances fees and the other does not.
  3. Press Calculate. The headline is the difference in total interest. The grid shows each payment and each total.
  4. Reset clears both loans.

How it's calculated

Payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
Total interest = payment × n − principal

Each loan is priced on its own. The comparison does not blend the rates. Interest is what you pay above principal if you make every scheduled payment and never pay extra. A loan with a lower payment can still be the expensive one if it runs long enough.

Refinancing an existing balance, where closing costs have to be earned back, is the refinance break-even calculator. A car price, tax, and trade-in belong on the auto loan calculator before you paste the financed amount here. A sale price on something you might finance is the ClearQuip discount calculator.

Worked example

Loan A: $10,000 at 6 percent for 36 months. The payment is $304.22 and the interest is about $951.90. Loan B: $10,000 at 4 percent for 60 months. The payment is lower, $184.17, but the interest is about $1,049.91. The longer, cheaper-rate loan costs more interest in this pair. Your pair will differ; the method is the same.

Assumptions and sources

Both loans use monthly compounding at APR ÷ 12 and the standard amortizing payment. The example figures are that formula, rounded to the cent for the payment and summed for interest. Origination fees should be added to the principal before you compare, or left out of both sides. The page does not score credit and does not know which loan a lender would approve.

FAQ

Should I pick the lower payment?

The lower payment is easier each month and often costs more interest. Look at the interest line and the total paid, not only the payment.

What if one loan has a fee?

Add the fee to that loan’s principal if you are financing it. If you pay the fee in cash, it is not in this comparison; add it to that loan’s total yourself.

Can the principals differ?

Yes. Compare the amounts you would actually borrow.

Does a 0 percent APR work?

Yes. The payment is principal divided by the number of months, and the interest is zero.

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