Loan Comparison Calculator
Compare two or three loan offers side-by-side to uncover differences in monthly payments, lifetime interest, upfront fees, and break-even timelines.
Live Loan Comparison
Enter loan terms and interest rates above or click Try an example to see side-by-side payments, total interest, and break-even timelines.
| Loan Metric | Loan A | Loan B |
|---|---|---|
| Monthly Payment (EMI) | $0.00 | $0.00 |
| Principal Borrowed | $0.00 | $0.00 |
| Total Interest Paid | $0.00 | $0.00 |
| Upfront Fees / Closing Costs | $0.00 | $0.00 |
| Effective APR (with fees) | 0.00% | 0.00% |
| Payoff Time | 0 mos | 0 mos |
| Total Lifetime Cost | $0.00 | $0.00 |
How to Use This Calculator
Comparing loan quotes across multiple lenders requires evaluating more than just the lowest interest rate. Follow these four simple steps:
- Set Borrowing Principal: Enter your total required loan amount in the top field, or toggle to Individual Amounts if you are testing different down payment scenarios.
- Enter Loan Terms & Rates: Input the quoted loan length (in years or months) and annual percentage rate (APR) for Loan A and Loan B.
- Include Upfront Fees: Add any origination points, underwriting fees, or documentation charges as either a flat dollar amount or a percentage of the loan balance.
- Review Clear Winners & Break-Even: Check the top verdict cards to identify which loan minimizes your total borrowing cost and which maximizes your monthly cash flow.
The Formula
Every fixed-rate loan relies on the standard amortization payment equation to determine your equated monthly installment (EMI):
Where each variable represents:
M= Monthly payment (principal and interest).P= Principal loan amount borrowed.r= Periodic monthly interest rate, calculated as annual APR divided by 12 (e.g., 6.0% APR = 0.06 / 12 = 0.005).n= Total number of monthly repayment periods (e.g., 30 years × 12 = 360 payments).
To evaluate total lifetime borrowing cost including lender fees, we calculate:
When comparing a loan with higher upfront points against a no-fee loan with a higher rate, the upfront fee break-even timeline is determined by:
Example
Imagine you are purchasing a home and evaluating two competing mortgage quotes on a $300,000 borrowing amount:
Scenario: 30-Year Fixed vs 15-Year Fixed Mortgage
Loan A (30-Year Fixed): $300,000 principal at 6.50% APR with $0 closing fees over 360 months.
Loan B (15-Year Fixed): $300,000 principal at 5.75% APR with $2,500 in upfront origination points over 180 months.
Loan A Computations:
- Monthly Payment: $1,896.20
- Total Interest: $382,633.47
- Total Lifetime Cost: $682,633.47
Loan B Computations:
- Monthly Payment: $2,491.23
- Total Interest: $148,421.45
- Total Lifetime Cost: $450,921.45 (includes $2,500 upfront points)
The Strategic Verdict: Loan A saves $595.03 per month in immediate out-of-pocket budget flexibility. However, Loan B saves a staggering $231,712.02 in total cost over its lifetime and clears your balance a full 15 years sooner.
Frequently Asked Questions
Should I choose the loan with the lowest monthly payment?
Not necessarily. A lower monthly payment often comes from extending the repayment term, which dramatically increases the total interest you pay over the life of the loan. If your monthly cash flow allows, a shorter term with slightly higher payments will usually save thousands of dollars.
How does upfront fee break-even work?
Break-even occurs when your accumulated monthly payment savings surpass the extra upfront closing fees or discount points paid. For instance, if Loan B charges $1,800 more upfront but reduces your payment by $60 per month, you reach break-even in 30 months (2.5 years).
What is the difference between interest rate and APR?
The interest rate is the base cost of borrowing the principal balance each year. The APR (Annual Percentage Rate) incorporates both the interest rate and mandatory lender fees, such as origination charges and administrative points, reflecting the true overall borrowing cost.
Can I compare loans with different borrowing amounts?
Yes. While standard comparison assumes the same loan balance, you can switch to "Individual Loan Amounts" in our tool to compare deals where you make different down payments or roll closing costs into the loan balance.
How does a 15-year loan compare to a 30-year loan?
A 15-year fixed loan generally features a lower interest rate and cuts your payoff time in half, saving 50% to 70% in total lifetime interest. However, monthly payments are typically 30% to 45% higher, requiring strong and reliable monthly income.