Compare up to 4 loans side by side — monthly payments, total interest, full amortization, 5-year cost snapshots, and break-even analysis on fees and points.
Enter two loan options — one with a higher rate and no fees, one with a lower rate and upfront fees or points. The calculator finds exactly when the cumulative interest savings exceed the fees paid.
Run the Compare tab first, then select a loan to view its full amortization schedule.
| Run Compare first, then select a loan above. |
Most borrowers compare loans by looking at one number: the monthly payment. This is exactly what lenders want — it obscures total cost and allows dealers, banks, and online lenders to profit from the difference between a rate that looks similar and a rate that actually is. A rigorous loan comparison requires evaluating at least four distinct metrics simultaneously: monthly payment, total interest paid, total cost including fees, and effective term. Missing any one of these creates blind spots that cost real money.
The Annual Percentage Rate (APR) includes both the nominal interest rate and the cost of upfront fees, expressed as an annualized percentage. Federal law (the Truth in Lending Act, or TILA) requires lenders to disclose APR precisely so consumers can make apples-to-apples comparisons. A loan advertised at 6.5% with $3,000 in origination fees has a higher APR than a loan advertised at 6.75% with no fees — on a 30-year mortgage the difference is roughly 6.65% APR vs. 6.75% APR, meaning the supposedly cheaper loan actually costs more if you pay it off early. The break-even point determines which offer is truly better given your expected time with the loan.
The correct way to rank competing loan offers is by total cost over your actual expected hold period, not by APR alone. Total cost = all monthly payments made + upfront fees paid − any principal remaining if you sell or refinance before payoff. This is especially important for mortgage borrowers, who statistically sell or refinance within 7–10 years despite taking 30-year loans. A loan that's cheapest held to maturity may not be cheapest if you move in 5 years — the fees paid upfront to get a lower rate may never recoup through interest savings in your actual holding window.
Mortgage discount points are upfront payments to the lender — each point equals 1% of the loan amount — in exchange for a permanent reduction in the interest rate. Typically, one point buys down the rate by 0.25 percentage points, though this varies by lender, loan program, and market conditions. The math is straightforward: points make sense if your monthly interest savings will exceed the upfront cost within your expected holding period. On a $400,000 mortgage, one point costs $4,000 and might reduce the monthly payment by $55. Break-even: $4,000 ÷ $55 = 72.7 months — about 6 years. If you expect to hold the loan longer, buy the point. If you're likely to refinance or move within 5 years, skip it and keep the cash.
When comparing loans with different terms, the monthly payment comparison is meaningless without also comparing total cost. A 72-month auto loan at 6% looks cheaper per month than a 48-month loan at the same rate, but costs $1,800 more in total interest on a $25,000 principal. The optimal comparison normalizes for time: calculate the total amount paid in each scenario over the same number of months. Use the 5-year snapshot in the Compare tab to see exactly how much each loan has cost through the same calendar period, regardless of term.
| Factor | What to Look For | Red Flags |
|---|---|---|
| APR | Lowest APR for your credit tier | APR much higher than nominal rate (high fees) |
| Total interest | Lowest over your hold period | Long term masking high total cost |
| Fees | Below 1% for personal loans | Origination fee above 3–5% |
| Prepayment penalty | None | Any penalty clause locks you in |
| Rate type | Fixed for certainty | Variable rate without cap disclosure |
| Monthly payment | Comfortably below 15% of take-home | Stretches budget with no buffer |
Counter-intuitively, a higher-rate loan sometimes produces the better financial outcome. If the lower-rate offer requires a significantly larger down payment, the opportunity cost of that capital (what it could earn invested) may exceed the interest savings. If the lower-rate offer has a prepayment penalty and you expect to pay early, the penalty can wipe out the rate advantage. If the lower-rate offer has fees that exceed your break-even timeline, you pay more even though the rate looks cheaper. This is why comparing loans on a single metric — even the seemingly comprehensive APR — leaves money on the table. The Break-Even tab models these scenarios precisely.
The numbers a loan comparison calculator produces are only as useful as the strategy applied to interpret them. Knowing the best loan mathematically is necessary but not sufficient — you also need to know when to negotiate, what to look past, and how lender incentives shape the offers you receive.
Dealers and lenders frequently present loan negotiations as monthly payment conversations because smaller monthly figures feel more manageable — and obscure total cost entirely. A salesperson stretching a $30,000 loan from 48 to 72 months reduces the monthly payment by roughly $140 while adding $2,800 in total interest. Always anchor your loan comparison to total cost and APR, then derive the monthly payment. When a lender quotes a rate, ask explicitly: "Is this your best rate, or is there a lower rate available if I increase my down payment or shorten the term?" Rate concessions are frequently available but rarely offered proactively.
Every hard credit inquiry made by a lender temporarily reduces your FICO score by approximately 2–5 points and remains on your report for two years. However, FICO's rate-shopping exception clusters multiple inquiries for the same loan type within a 14–45 day window and treats them as a single inquiry. This means you can aggressively shop among 4–6 lenders within that window with no additional score penalty beyond the first inquiry. Time your rate shopping to a concentrated 2–3 week period, submit all applications within that window, then use this calculator to compare the results before committing. Never let urgency push you into accepting the first offer before your shopping window is complete.
These three lender types serve different markets and compete on different dimensions. Credit unions are member-owned nonprofits that typically offer rates 0.5–2% below comparable bank products — their profit goes back to members rather than shareholders. The tradeoff is stricter membership requirements and sometimes slower processes. Traditional banks offer convenience, branch access, and relationship-based rate discounts for existing customers (checking, savings, or prior loans). Online lenders offer speed and accessibility, often approving and funding within 24–48 hours, but rates vary widely — some are excellent, others target subprime borrowers at rates rivaling credit cards. Always include at least one credit union in any loan comparison, as they consistently outperform on rate for qualified borrowers.
When you factor in extra monthly payments, loan comparisons shift in ways that aren't immediately obvious. A slightly higher-rate loan with a shorter required term combined with aggressive extra payments can outperform a lower-rate loan stretched over a longer term. The key insight is that extra payments go entirely to principal, eliminating all the future interest that would have accrued on that balance. On a $200,000 loan at 7% over 30 years, adding $300 per month saves approximately $109,000 in interest and pays the loan off 10 years early. Use the extra payment field in each loan card to model how realistic additional payments affect total cost, then compare loans on adjusted total cost rather than base-case total cost. The borrower who commits to extra payments can often afford to prioritize rate flexibility over term minimization.
This calculator models fixed-rate loans because variable rates require interest rate forecasting to compare accurately. When comparing a fixed-rate offer against a variable-rate offer, the variable rate is only cheaper if rates remain stable or fall during your loan term. Historically, fixed-rate premiums of 0.5–1.5% over variable introductory rates have proven worthwhile for borrowers who held loans longer than 5 years, because rate reset risk over that period frequently eliminated the initial savings. For loans under 3 years, a variable rate's introductory period may last the full loan term, making it genuinely cheaper. For longer holds, the certainty of a fixed payment has real economic value beyond the quoted rate comparison.
Disclaimer: Results are estimates for informational and educational purposes only and do not constitute financial or legal advice. Actual loan terms, rates, and costs vary by lender and borrower profile. Consult a qualified financial professional before making borrowing decisions.