Loan Comparison Calculator
Compare multiple loan options side by side to find the best deal. Analyze monthly payments, total costs, interest rates, and APR to make an informed borrowing decision.
Loan Comparison Tool
Loan #1
Loan #2
Loan Comparison Results
| Metric | Loan #1 | Loan #2 |
|---|---|---|
| Loan Amount | $10,000.00 | $10,000.00 |
| Monthly Payment | $212.47 | $222.44 +$9.97 |
| Loan Term | 5 years | 5 years |
| Total Interest | $2,748.23 | $3,346.67 |
| Total Payment | $12,748.23 | $13,346.67 |
| APR | 10.00% | 12.00% |
Best values are highlighted in green
APR includes fees: The most accurate metric for loan comparison
Recommendation: Choose the loan with the lowest APR and total payment that fits your budget
Loan Analysis
Example Comparison
Car Loan Shopping Scenario
Loan Amount: $10,000 for 2 years
Offer A: 10% rate + $100 fee
Offer B: 12% rate + $200 fee
Offer C: 8% rate + $500 fee
Best Choice: Offer A
Monthly Payment: $461.45
Total Payment: $11,174.78
APR: 11.01% (lowest despite higher interest rate)
💡 Loan Comparison Tips
APR is Key
The best indicator for comparing loans as it includes fees
Total Cost
Consider the total payment amount over the loan's lifetime
Monthly Budget
Ensure it fits comfortably within your budget
Loan Terms
Shorter terms mean higher payments but less total interest
Loan Shopping Tips
How to Compare Loans Effectively
Key Factors to Compare
- •Annual Percentage Rate (APR): The most important factor as it includes both interest rate and fees
- •Monthly Payment: Must fit within your monthly budget comfortably
- •Total Cost: The total amount you'll pay over the life of the loan
- •Loan Term: Affects both monthly payment and total interest paid
- •Fees and Costs: Origination fees, prepayment penalties, and other charges
Best Practices
- •Get quotes from at least 3-4 different lenders
- •Compare offers received within a 14-45 day window
- •Check for prepayment penalties if you plan to pay off early
- •Consider the lender's reputation and customer service
- •Read all terms and conditions carefully before signing
Understanding Loan Terms
APR vs Interest Rate
The interest rate is the cost of borrowing the principal amount. APR includes the interest rate plus additional fees and costs, giving you the true cost of the loan.
Loan Term Impact
Longer terms mean lower monthly payments but more total interest paid. Shorter terms have higher monthly payments but cost less overall.
Prepaid Fees
Origination fees, processing fees, and other upfront costs. These fees effectively reduce the amount you receive but must be included in your cost comparison.
Loan Comparison Example
Scenario: $10,000 Car Loan for 2 Years
| Offer | Interest Rate | Prepaid Fee | Monthly Payment | Total Payment | APR |
|---|---|---|---|---|---|
| Loan A | 10.0% | $100 | $461.45 | $11,174.78 | 11.01% |
| Loan B | 12.0% | $200 | $470.73 | $11,497.63 | 14.05% |
| Loan C | 8.0% | $500 | $452.27 | $11,354.55 | 13.14% |
Result: Despite having the highest interest rate, Loan A offers the best overall value with the lowest total payment and APR due to its low prepaid fees.
Frequently Asked Questions
What's the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal loan amount. APR (Annual Percentage Rate) includes the interest rate plus additional fees and costs, providing a more complete picture of the total cost of the loan.
How many lenders should I compare?
It's recommended to get quotes from at least 3-4 lenders to ensure you're getting the best deal. Multiple rate shopping within a 14-45 day window typically counts as a single inquiry on your credit report.
Should I choose the loan with the lowest monthly payment?
Not necessarily. While lower monthly payments improve cash flow, they often come with longer terms that result in higher total interest costs. Consider both monthly affordability and total cost.
What fees should I watch out for?
Common fees include origination fees, application fees, prepayment penalties, late payment fees, and processing fees. Always ask for a complete list of all fees associated with the loan.