Formula
Loan comparison formula
Payment = principal x monthly rate / (1 - (1 + monthly rate)^-months)The same amortized loan formula is applied to both options.
Money Calculators
Loan Comparison Calculator
Use this loan comparison calculator to compare two loan offers by monthly payment and total interest before choosing a term or rate.
Reviewed May 25, 2026EstimateFormula shown
Live calculator
Loan comparison
Lower monthly paymentOption B
A: $500.95 vs B: $453.12.
Lower total interestOption A
A: $5,056.92 vs B: $7,624.93.
Payment difference$47.82
60 payments for A, 72 for B.
How to compare the two loans
Lower monthly payment and lower lifetime interest can point to different options. Use the table to decide whether monthly cash flow or total cost matters more for this decision.
Side-by-side loan table
Payment, term, total interest, and total paid for each option.
| Option | Payment | Term | Interest | Total paid |
|---|---|---|---|---|
| Option A | $500.95 | 60 months | $5,056.92 | $30,056.92 |
| Option B | $453.12 | 72 months | $7,624.93 | $32,624.93 |
How to use
Steps
- Enter the loan amount.
- Enter rate and term for option A.
- Enter rate and term for option B.
- Compare monthly payment, total interest, and total paid before choosing the offer.
Example
Sample calculation
Loan amount$25,000
Option A$500.95/mo, $5,056.92 interest
Option B$453.12/mo, $7,624.93 interest
Lower paymentOption B
Lower interestOption A
Calculator use
Best for
- Quick loan comparison from loan amount, option a rate and option a years.
- Personal finance scenarios before changing a budget, loan, savings goal, or purchase plan.
- Monthly cash flow, affordability, debt payoff, or future-value estimates.
- Assumption checks before talking with a lender, tax preparer, employer, or financial professional.
Before relying on it
Check first
- Entering loan amount, option a rate and option a years from different time periods or scenarios.
- Mixing gross income, take-home income, one-time costs, and monthly costs in the same comparison.
- Forgetting taxes, fees, insurance, irregular bills, or minimum payments when using an estimate.
- Treating a planning estimate as a quote, tax filing result, approval decision, or guaranteed return.
Benchmarks
How to read the result
The calculator is a decision aid, not a fixed rule. Use the output to compare scenarios and document your assumptions.
Lower paymentCash-flow friendly
Lower monthly payment can help cash flow but may increase total paid.
Lower interestLower total cost
A shorter or lower-rate loan often saves interest over the full term.
Different termsCompare both
Term length can change total cost even when monthly payment looks attractive.
Calculator accuracy
Methodology and assumptions
The formula, inputs, example, and limitations are shown so the result is checkable, not just a number in a box.
Formula
Payment = principal x monthly rate / (1 - (1 + monthly rate)^-months)
Inputs used
Loan amount, Option A rate, Option A years, Option B rate, Option B years
Limitations
Results are estimates for quick planning and should be checked before important financial, legal, tax, health, or business decisions.
Last reviewed
May 25, 2026
Cite this page
Toolkit Shelf. Loan Comparison Calculator. Retrieved May 25, 2026, from https://toolkitshelf.com/tools/loan-comparison-calculator
FAQ
Common questions
How do I compare two loans?
Compare both the monthly payment and total interest because a lower payment can still cost more over time.
Why can a longer loan cost more?
Longer loans spread payments across more months, giving interest more time to accumulate.
Does this include fees?
No. Add fees to the loan amount if you want them included in the payment comparison.
Which loan should I choose if one has lower payment and the other has lower interest?
Use the side-by-side table to decide whether monthly cash flow or total cost matters more. The cheaper lifetime loan is not always the easiest monthly payment.