Loans
Loan Comparison Calculator
The lowest monthly payment isn't always the cheapest loan — a longer term lowers the payment but piles on interest. Enter the same amount at two rates and terms to compare both payments, the total interest each charges, and which one costs less over its life.
Tested against worked examplesHow we verify
Loan B costs less overall: $71,014
Loan B costs less overall
$71,014
You'd save this much in total by choosing Loan B.
- Loan A — monthly
- $1,996
- Loan B — monthly
- $1,799
- Loan A — total interest
- $418,528
- Loan B — total interest
- $347,514
- Monthly payment gap
- $197
Difference between the two payments.
Side by side
| Metric | Loan A | Loan B |
|---|---|---|
| Monthly payment | $1,996 | $1,799 |
| Total interest | $418,528 | $347,514 |
| Total paid | $718,528 | $647,514 |
Compare scenariosTry three values of one input
| Loan amount | |||
|---|---|---|---|
| Loan B costs less overall | $63,911 | $71,014+$7,103 | $78,113+$14,202 |
| Loan A — monthly | $1,796 | $1,996+$200 | $2,196+$399 |
| Loan B — monthly | $1,619 | $1,799+$180 | $1,979+$360 |
| Loan A — total interest | $376,675 | $418,528+$41,852 | $460,380+$83,705 |
| Loan B — total interest | $312,764 | $347,514+$34,750 | $382,267+$69,503 |
| Monthly payment gap | $178 | $197+$20 | $217+$39 |
Every other input stays at the value you set above — currently $300,000 for loan amount. Differences are measured against the first column.
Saved scenariosSave this calculation
Saved in this browser only — no account, and nothing is sent to us. Clearing your browser data deletes them.
How this calculator works
Each loan's monthly payment fully amortizes the principal over its term at its rate (standard PMT formula). Total paid = payment × number of months; total interest = total paid − principal. The 'cheaper' loan is the one with the lower total paid.
Both loans use the same principal so the comparison is apples-to-apples. Rates are treated as fixed for the full term, with no fees, prepayment, or extra payments — enter APRs to approximate fee differences.
What this assumes
- Each loan is compared on its own stated terms, with fees included only where you enter them.
- It assumes both loans are held to term. A shorter holding period favours the option with lower up-front fees.
- Rate types are treated as given — comparing a fixed loan against a variable one compares certainty against a forecast.
What changes this number
- Total cost rather than payment
- The lower payment is frequently the more expensive loan, because the term is longer.
- Fees
- Where two loans quote the same rate, fees are the entire difference — and the reason APR exists.
- Term
- Changes both the payment and the total, in opposite directions.
A worked example
Take the 7% vs 6%, both 30-year scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Loan amount
- $300,000
- Loan A — rate (APR)
- 7%
- Loan A — term
- 360 months
- Loan B — rate (APR)
- 6%
- Loan B — term
- 360 months
What it returns
- Loan B costs less overall
- $71,014
- Loan A — monthly
- $1,996
- Loan B — monthly
- $1,799
- Loan A — total interest
- $418,528
- Loan B — total interest
- $347,514
Try an example
Frequently asked questions
How do I compare two loans fairly?
Look past the monthly payment to the total interest and total paid over each loan's full term. A lower payment often just means a longer term, which usually means more interest. Comparing the same amount at each loan's rate and term — as this tool does — shows the true lifetime cost.
Is a lower monthly payment always better?
No. Stretching a loan from 15 to 30 years lowers the payment but can double the interest. A lower payment helps monthly cash flow, but if you can afford the higher one, the shorter, cheaper loan usually wins. This calculator flags which loan costs less overall regardless of payment size.
Should I compare by APR or interest rate?
APR is the fairer comparison because it folds in fees and points, not just the note rate. If one loan has lower fees, enter each loan's APR to capture that. For a note rate with separate upfront fees, use the APR calculator first, then compare the APRs here.
Does this work for any loan type?
Yes — it's a general fixed-rate, fully-amortizing comparison, so it fits mortgages, auto loans, personal loans, and student loans. It assumes level monthly payments and no extra principal. For type-specific costs like a car's taxes and fees, use the dedicated calculator, then compare financing here.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.