Loan Comparison Calculator
Loan Comparison Calculator
Loan A
Loan B
Most borrowers refinance or sell well before the full term, which changes which loan is cheaper.
| Loan A | Loan B | |
|---|---|---|
| Monthly payment | $1,896.20 | $1,798.65 |
| Upfront fees | $3,000 | $6,000 |
| Total interest | $382,633 | $347,515 |
| Total cost (full term) | $385,633 | $353,515 |
| Effective APR (with fees) | 6.60% | 6.19% |
| Cost if kept 7 yrs | $133,530 | $126,005 |
Based on your results — what to do next:
Add taxes and insurance
Loan B runs $1,798.65/mo before taxes and insurance. See the full monthly housing payment.
Could you refinance later?
Keeping the loan 7 years makes Loan B cheaper by $7,525. Check whether refinancing down the road beats paying points now.
Will a lender approve it?
A $1,896.20/mo payment feeds straight into your debt-to-income ratio.
A loan comparison calculator puts two loan offers side by side using amount, interest rate, term, points and fees. It reports each loan monthly payment, total interest, fees and effective APR, and shows which loan is cheaper if you only keep it for a few years — the question most borrowers actually face.
How Two Loans Are Compared
① Monthly payment
M = L × i ÷ (1 − (1 + i)^−n)
i = APR ÷ 12 and n = months. Standard fixed-rate amortization.
② Upfront fees and total cost
Fees = L × Points% + Fixed fees; Total cost = Interest + Fees
Interest = M × n − L.
③ Cost over your holding period
Cost(k) = M × k + Fees + Balance after k months − L
Compares the true cost of borrowing if you sell or refinance after k months; effective APR solves for the rate on net proceeds after fees.
| Variable | Meaning | Typical Value |
|---|---|---|
| L | Loan amount | Any |
| APR | Annual interest rate | Mortgage 5–7%, auto 5–9%, personal 8–20% |
| Points% | Origination fee or discount points | 0–3% of loan |
| k | Months you keep the loan | Often 60–120 for mortgages |
Worked Example — $300,000, 30 years: Loan A 6.5% with 0.5% fee vs. Loan B 6.0% with 1.5% fee (each plus $1,500 other fees)
- Loan A payment: $1,896/mo; Loan B payment: $1,799/mo
- Upfront fees: A = $3,000, B = $6,000
- Total interest over 30 years: A ≈ $382,633, B ≈ $347,515
- Loan B saves about $97/month but costs $3,000 more upfront — its cumulative cost drops below Loan A after roughly 24 months
- Keep the loan 7 years and Loan B is cheaper by about $7,500; sell within 2 years and Loan A wins
💡 Pro-Tip
Compare cost over the time you will actually hold the loan. A lower rate with higher points only pays off after the break-even month. If you may move or refinance sooner, the cheaper full-term loan can be the more expensive choice. Also compare the effective APR, which folds fees into the rate — it is the apples-to-apples number that headline rates hide.
Loan Comparison Calculator FAQ
How do I compare two loans?
Compare monthly payment, total interest, upfront fees and the effective APR. Then check cost over the time you expect to keep the loan, since fees weigh more when the holding period is short.
Is a lower interest rate always better?
No. A lower rate that comes with points or fees can cost more if you refinance or sell before the break-even point. Divide extra upfront fees by the monthly savings to estimate that point.
What is the effective APR?
The effective APR is the interest rate that equates the net amount you receive (after fees) with the payments you make. It is higher than the quoted rate whenever fees are charged.
Should I choose a shorter or longer term?
A shorter term raises the monthly payment but cuts total interest dramatically. Compare both terms by entering the same amount and rate with different years.