Loan Comparison Calculator
Compare two loans side by side to find the best option for your borrowing needs
Compare Loan Options
Evaluate two loan options by calculating monthly payments, total interest costs, and total costs. Make an informed decision by comparing the full financial impact of each loan.
Loan A
Loan B
Formula
M = P * r(1+r)^n / ((1+r)^n - 1)
This formula calculates the fixed monthly payment for a loan. P is the principal amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments (years multiplied by 12).
Frequently Asked Questions
When to Use the Loan Comparison Calculator
- Comparing multiple loan offers from different lenders
- Deciding between different loan terms (15-year vs 30-year mortgage)
- Evaluating auto loan options with varying rates
- Determining the best personal loan option
- Understanding the true cost of different loan structures
Common Mistakes
- Only comparing monthly payments: A lower payment over a longer term means more total interest. Always compare total cost, not just monthly payment.
- Ignoring origination fees: Many loans charge fees to originate or close. Factor these into your total cost comparison.
- Forgetting property taxes and insurance: Mortgage calculations should include taxes and insurance, not just principal and interest.
- Not accounting for early payoff: If you plan to pay off early, focus on total interest during the period you will hold the loan.
- Comparing variable and fixed rates directly: Variable rates may increase, making them more expensive than they appear. Compare worst-case scenarios.
Formula Explained
Monthly payment is calculated using the standard loan formula:
M = P * r(1+r)^n / ((1+r)^n - 1)Where M = monthly payment, P = principal, r = monthly interest rate, n = number of payments. Total cost = monthly payment × number of payments.