Formula
Loan comparison formula
Payment = principal x monthly rate / (1 - (1 + monthly rate)^-months)The same amortized loan formula is applied to both options.
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.
Planning estimate
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 |
Use this as a planning estimate. Taxes, fees, rates, account terms, provider policies, local rules, and timing can change real-world results.
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
- Estimating affordability, payment, payoff, interest, APR, refinance, rent, or debt scenarios before a money decision.
- Comparing terms, rates, balances, fees, taxes, insurance, debt payments, or split shares with assumptions visible.
Before relying on it
Check first
- Treating an estimate as an approval, quote, credit decision, payoff statement, tax result, or legal payment obligation.
- Leaving out fees, escrow, insurance, property tax, PMI, minimum payments, compounding, promotional rates, or local rules.
- Comparing scenarios with different time horizons, upfront costs, credit assumptions, or one-time versus monthly costs.
Details
What to know before using the result
Same principalCleaner comparison
Use the same loan amount for both options unless you intentionally want to compare different fees or amounts financed.
Monthly vs totalTwo winners possible
One loan can have the lower payment while the other has lower total interest. Compare both before deciding.
Fees and creditsAdd if known
This calculator compares principal and interest. Add financed fees to the loan amount, or compare upfront fees separately.
Source notes
References used for this calculator
Benchmarks
How to read the result
Lower payment: Cash-flow friendly.
Lower monthly payment can help cash flow but may increase total paid.
Lower interest: Lower total cost.
A shorter or lower-rate loan often saves interest over the full term.
Different terms: Compare both.
Term length can change total cost even when monthly payment looks attractive.
Calculator accuracy
Methodology and assumptions
Formula, inputs, limitations and review record
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
Money results are planning estimates. Actual taxes, account terms, rates, fees, timing, local rules, and provider policies can change the real-world result.
Review record
Catalog QA baseline on June 6, 2026. This date marks the catalog-wide automated and editorial QA baseline, not a tool-specific expert review.
Cite this page
Toolkit Shelf. Loan Comparison Calculator. 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.
Why can lender numbers differ from this result?
Lenders can use verified income, credit profile, reserves, fees, escrow rules, insurance, taxes, underwriting guidelines, and product-specific terms.
What assumption should I stress test?
Stress test rates, payment timing, fees, taxes, insurance, debt payments, and payoff timing before treating a loan or housing estimate as comfortable.
Leave passwords, account numbers, and private medical or tax information out of your report.