Loan Comparison Tool
Put two loan offers side by side and instantly see which one saves you more money over the life of the loan.
How to Compare Loan Offers Effectively
Choosing between two loan offers isn't as simple as picking the lowest interest rate. A loan with a lower rate but higher origination fees — or a longer term — can end up costing you significantly more over time. Our Loan Comparison Tool puts every critical metric side by side so you can make an informed decision based on the total cost of borrowing, not just the headline rate.
When you receive competing loan offers, enter the details for each into the tool above. The calculator instantly computes monthly payments, total interest, total cost (including fees), and the true APR for each loan. Green highlights mark the winner in each category, and the savings banner shows you exactly how much you'll save by choosing the better option.
Key Metrics to Compare
Monthly Payment
This is the amount due each month. A lower monthly payment can help your cash flow, but it often comes at the cost of a longer term — which means more total interest. Compare this figure alongside total cost to see the full picture.
Total Interest
The total amount of interest you'll pay over the life of the loan. This is where the real difference between two loans becomes apparent. Even a 1-2% rate difference can translate to thousands of dollars over a multi-year loan. Our tool highlights which loan charges less total interest so you can see the lifetime impact immediately.
True APR (Annual Percentage Rate)
The APR accounts for both the interest rate and any upfront fees (like origination fees or points), expressed as a single annual rate. This is the most accurate apples-to-apples comparison metric. A loan advertising 7% with a 5% origination fee has a much higher true APR than a loan at 8.5% with no fees. Always compare APR, not just the stated interest rate.
Origination Fees
Origination fees are charged by lenders to cover processing costs, typically ranging from 1% to 8% of the loan amount. These fees are usually deducted from your loan proceeds before you receive them, meaning you get less cash but repay the full amount. Our calculator factors these fees into the true APR calculation so you can see their real impact on your borrowing cost.
Common Loan Comparison Mistakes
- Only comparing monthly payments: A lower payment usually means a longer term and more total interest. Always check total cost alongside the monthly figure.
- Ignoring fees: A "0% origination fee" loan at a slightly higher rate may cost less overall than a "low rate" loan with a 5% fee. The true APR reveals the real difference.
- Comparing different loan amounts: If one lender offers $15,000 and another offers $20,000, the comparison isn't apples to apples. Match the amounts to what you actually need.
- Forgetting about flexibility: Beyond the numbers, consider prepayment penalties, payment flexibility, and lender reputation. The cheapest loan isn't always the best if it locks you into rigid terms.
When to Use This Tool
Use the Loan Comparison Tool whenever you're evaluating multiple offers — whether for a personal loan, auto loan, mortgage, or student loan refinance. It's especially valuable during pre-qualification, when lenders give you estimated terms and you need to decide which offer to pursue. Pair it with our Personal Loan Calculator for a deeper dive into individual loan details, or our APR Calculator to understand how fees affect your effective rate.
Frequently Asked Questions
Not necessarily. A loan with a lower interest rate but high origination fees can end up costing more than a slightly higher-rate loan with no fees. The true APR — which accounts for both the rate and fees — is the best single metric for comparison. Also consider the loan term: a lower rate over a longer period may result in more total interest paid than a slightly higher rate over a shorter term.
Total cost (principal + total interest + fees) is the most comprehensive metric because it captures everything you'll pay over the life of the loan. However, if cash flow is a concern, monthly payment matters too. The true APR is best for apples-to-apples rate comparison. We recommend looking at all three together to make the most informed decision.
Origination fees increase your effective borrowing cost because you receive less money upfront but repay the full loan amount plus interest. For example, a $20,000 loan with a 4% origination fee means you receive $19,200 but make payments on the full $20,000. This effectively raises your APR above the stated interest rate. Our tool calculates the true APR for each loan so you can see the real impact of these fees.
Yes! Our tool allows you to input different amounts and terms for each loan, which is common in real-world scenarios where lenders offer different maximum amounts or term options. Just keep in mind that when comparing loans with different amounts, the total cost comparison reflects the difference in both borrowing amount and rate, so the APR comparison may be most useful for isolating the rate difference.
A shorter term saves you money on total interest, but requires higher monthly payments. The "better" choice depends on your financial situation. If you can comfortably afford the higher payment without straining your budget (keeping total debt payments under 36% of gross income), the shorter term will save you money. If the higher payment would cause financial stress, a longer term with lower payments might be the safer choice — just understand you'll pay more in total interest.
This calculator is for educational purposes only. Results are estimates and should not be considered financial advice. Actual loan terms, rates, and fees may vary by lender. Consult a qualified financial advisor for personalized guidance.