Use this loan comparison calculator to help you evaluate two different loan offers side by side to see which one actually costs you less
Loan Comparison Calculator
Compare two loans side-by-side with amortization and extra payments
Amortization Schedules
View Schedule for Loan 1
View Schedule for Loan 2
What is a Loan Comparison Calculator?
A loan comparison calculator lets you evaluate two different loan offers side by side to see which one actually costs you less. When you're shopping for financing, whether it's a mortgage, car loan, personal loan, or student loan, lenders throw numbers at you: interest rates, monthly payments, and terms. It's hard to know which deal is truly better just by looking at those figures in isolation.
This calculator cuts through the confusion by putting both loans next to each other and showing you exactly what each one costs over time. Enter the loan amount, interest rate, and term for each option, and you'll instantly see monthly payments, total interest charges, and complete costs. You can even add extra monthly payments to see how aggressively paying down either loan changes the math.
The real value comes from visual comparisons. Charts show you at a glance which loan costs more overall and how the balances decrease over time. Detailed amortization schedules break down every payment, revealing exactly where your money goes month by month. This kind of transparency means you can confidently choose the loan that saves you the most money, not just the one with the catchiest marketing pitch.
Understanding What Information to Enter
For each loan you're comparing, you'll need to provide several key details:
Loan Amount – The total sum you're borrowing. This is what the lender gives you and what interest gets calculated on. Make sure both loans use the same amount so you're making a true comparison. If Loan 1 is for $100,000 and Loan 2 is for $95,000, you're not comparing apples to apples.
Interest Rate – The annual percentage rate each lender is charging. This is where the real differences often hide. A loan advertising "low monthly payments" might have a higher rate that costs you thousands more over the years. Enter the actual APR you've been quoted—not promotional teaser rates that expire.
Term (Years) – How long you'll take to repay each loan. Common terms range from 3 to 30 years depending on the loan type. Longer terms mean smaller monthly payments but substantially more interest. Shorter terms mean bigger monthly bills but dramatic interest savings. Sometimes lenders offer different terms, which makes direct comparison tricky—this calculator handles that by showing you the complete picture for both.
Extra Monthly Payment – This optional field is powerful. If you plan to pay more than the minimum each month, enter that amount here. Maybe you want to throw an extra $100 or $200 at the loan whenever possible. The calculator shows you exactly how much faster you'll pay off the loan and how much interest you'll dodge. You can test this on one loan or both to see which benefits more from aggressive paydown.
How the Loan Comparison Calculator Processes Your Loans
The calculator runs through a precise sequence for each loan independently, ensuring no data gets mixed up between them:
Step 1: Calculate the Base Monthly Payment
Using the standard amortization formula, it determines your required monthly payment:
Monthly Payment = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]
Where P is your loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of months. This formula ensures each payment covers that month's interest while steadily reducing what you owe.
When the interest rate is zero (rare but sometimes offered), the math simplifies to just dividing the loan amount evenly across all months.
Step 2: Build the Complete Payment Schedule
The calculator then processes the loan month by month:
For each month, it:
- Calculates interest on the remaining balance
- Determines how much of your payment reduces the principal
- Applies any extra payment you specified directly to the principal
- Updates the remaining balance
- Tracks cumulative interest paid
This continues until the balance hits zero. If you're making extra payments, the loan finishes earlier than the original term, and the calculator captures that automatically.
Step 3: Calculate Total Costs
After processing all payments, it tallies:
- Total interest paid across the entire loan
- Total amount you'll pay the lender (principal + interest)
- Actual number of months needed to pay off the loan
- Your true monthly payment (base payment + any extra)
Step 4: Compare the Results
Now comes the valuable part. The calculator displays both loans' results side by side, making differences obvious. You can immediately see which loan has the lower monthly payment, which accumulates less interest, and which costs less overall.
Understanding Your Comparison Results
The calculator presents your results in several ways to help you make an informed decision:
Monthly Payment Comparison – Shows what you'll actually pay each month for each loan. If you've added extra monthly payments, which are included here. Lower isn't always better; sometimes paying more monthly saves you significantly on total interest.
Total Interest Paid – This is the critical number many borrowers overlook. It shows every dollar of interest you'll pay over the loan's life. A loan with a slightly higher monthly payment might have dramatically lower total interest, meaning it's the smarter choice if you can afford the monthly difference.
Total Cost (Principal + Interest) – Combines everything you'll pay the lender from start to finish. This is your true cost comparison. The loan with the lower total cost is generally the better deal, assuming the monthly payment fits your budget.
Total Cost Breakdown Chart – A stacked bar chart showing how each loan splits between principal (what you borrowed) and interest (what borrowing costs you). One glance tells you which loan loads you up with more interest charges. It's visual proof of which deal is genuinely better.
Payoff Progress Chart – A line graph tracking how both loan balances decrease over time. You'll see if one loan pays down faster than the other, especially when extra payments are involved. The loan that hits zero first is the one you'll own outright sooner.
Amortization Schedules – Detailed month-by-month breakdowns for each loan showing:
- Month number
- Total payment amount
- How much went to principal
- How much went to interest
- Remaining balance after the payment
These schedules reveal the truth about early loan payments—in the beginning, you're paying mostly interest with only small amounts reducing what you actually owe. As months pass, the ratio flips. Understanding this helps you see why extra payments early in a loan's life have such a powerful impact.
Why This Loan Comparison Calculator?
Lenders rarely make direct comparisons easy. Loan 1 might advertise "only $850 monthly!" while Loan 2 touts "just 3.9% APR!" They're comparing different things, making it hard to know which is actually cheaper. One might have lower monthly payments but a longer term that doubles your total interest. Another might have a higher rate but a shorter term that ends up costing less overall.
This calculator eliminates the guesswork. By putting both offers in the same format, you can make a true comparison based on what really matters: total cost and whether the monthly payment fits your budget.
The extra payment feature adds another layer of insight. Maybe one loan benefits more from aggressive paydown than the other. Perhaps adding $150 monthly to Loan 1 makes it cheaper than Loan 2, even though Loan 2 looked better initially. You won't know until you test it.
Real savings happen when you understand these differences. Choosing the right loan might save you $5,000, $15,000, or even $50,000 depending on the loan size and term. That's real money—money you could invest, save, or spend on what matters to you instead of handing it to a lender as interest.
Walk into any loan negotiation armed with this knowledge, and you're in control. You'll know exactly which offer makes financial sense, and you'll have the numbers to back up your decision. That confidence transforms borrowing from a confusing, stressful experience into an informed, strategic choice that supports your long-term financial health.