Loan Comparison Calculator
Compare multiple loan offers side by side to find the best option for your needs.
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About the Loan Comparison Calculator
Comparing loan offers means more than checking which rate is lowest. Origination fees, term length, monthly payment fit, and total interest all matter. This calculator and page give you the framework to compare two or more offers head-to-head.
The Formula
Effective cost = Origination + (Monthly payment × Number of payments) − Principal. APR captures both the rate and the fees in a single annualized number — this is the right comparison metric for similar terms.
Worked Example
Loan A: $20,000 at 7.99% APR for 5 years, no fee → $405/month, $4,330 interest. Loan B: $20,000 at 7.49% APR for 5 years, $500 origination → $401/month + $500 fee, total cost $4,560. Loan A wins by $230 despite higher rate.
APR is the single best comparison number
APR includes most loan fees expressed as an annual percentage. Comparing 7.5% APR vs 8.0% APR is more meaningful than comparing 7.0% rate (with $1,500 in fees) vs 7.75% rate (with no fees) — the first probably has the higher APR.
When term differences matter
Two loans of different terms cannot be compared by monthly payment alone. The longer term will always have a lower payment but higher total interest. Standardize comparison by either: same total payback period, or APR (which normalizes term differences).
Prepayment penalties
Most modern personal and mortgage loans have no prepayment penalty. Some legacy products do. Always check the loan estimate — a low rate with a 3% prepayment penalty within the first 3 years can erase the savings if you refinance early.
Common Mistakes
- Comparing by monthly payment alone. The longer-term loan always wins on that metric, but costs more.
- Ignoring origination fees. A 5% origination on a $20,000 loan is $1,000 of cost not shown in the rate.
- Forgetting to compare lenders. The 'first quote' is rarely the best one — get 3.
Frequently Asked Questions
How many lenders should I get quotes from?
At least 3 for any loan. Personal loans, mortgage, auto — all benefit from comparison shopping. Multiple inquiries within 14-45 days count as one inquiry for credit scoring.
Will applying to multiple lenders hurt my credit?
Multiple inquiries for the same loan type within the rate-shopping window (14-45 days depending on the scoring model) count as a single inquiry.
This calculator is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a licensed professional before making significant financial decisions.