Loan Comparison Calculator - Compare Borrowing Costs
Compare two loan offers by monthly payment, total interest, and interest difference after down payments and extra payments.
Enter amount, rate, term, optional down payment, and optional extra principal for two loans to compare monthly payment and total interest.
Loan Comparison Calculator - Compare Borrowing Costs
Compare two loan offers by monthly payment, total interest, and interest difference after down payments and extra payments.
About the Loan Comparison Calculator
Choosing between two loan offers is rarely just a rate bake-off. Term, down payment, and optional extra principal change both the monthly bill and the lifetime interest. The loan comparison calculator builds a fixed-rate amortizing payment for each offer after subtracting the down payment, adds any extra monthly principal you plan to send, then walks each loan to payoff and subtracts total interest so a positive difference means loan 1 costs more interest than loan 2.
Principal is amount minus down payment. The scheduled monthly payment uses the standard annuity formula with monthly rate equal to the annual rate divided by 1,200 and n equal to years times 12. Each month, interest is remaining balance times the monthly rate, and the rest of the scheduled payment plus extra goes to principal. Tiny leftover balances under half a cent are cleared so floating-point noise does not add a phantom month. Total interest is the sum of monthly interest until the balance hits zero.
Use the loan comparison calculator to weigh a 30-year quote against a 15-year quote, a higher rate with a smaller down payment against a lower rate with more cash at closing, or a personal-loan APR against a longer installment with $50 extra principal. A 15-year loan often shows a higher monthly payment and much lower total interest. Extra principal on the cheaper rate can close the gap further. Points, origination fees, and PMI are not inputs; if they matter, add them mentally to cash at close or to the rate you type.
Both loans must amortize. If a payment cannot cover monthly interest, that offer fails. Down payment cannot equal or exceed the amount. Extra payments are optional and treated as zero when blank. The interest difference is loan 1 total interest minus loan 2 total interest, so a negative result means loan 1 is cheaper on interest.
The model ignores taxes, insurance, ARM resets, prepayment penalties, and the opportunity cost of a larger down payment. Affordability is about the monthly payment; wealth is about total interest and cash used at close. Re-run when a lender revises the rate lock, and confirm the comparison against the loan estimate before you sign.
Loan Comparison Examples
Each pair uses amortizing payments after down payment, then adds optional extra principal until payoff.
| Scenario | Output | Planning note |
|---|---|---|
| Both $300,000 with $60,000 down; loan 1: 6.5% for 30 years; loan 2: 6% for 15 years | Loan 1 $1,516.96/mo and $306,106.77 interest; loan 2 $2,025.26/mo and $124,546.15 interest; difference $181,560.62 | The 15-year offer costs more each month and saves about $182,000 of interest. |
| Both $20,000; loan 1: 9.9% for 5 years; loan 2: 6.5% for 5 years plus $50 extra principal | Loan 1 $423.96/mo and $5,437.45 interest; loan 2 $441.32/mo and $3,010.95 interest; difference $2,426.50 | A lower APR plus $50 extra cuts interest by about $2,400 on a small installment. |
| Both $450,000; loan 1: 7% for 30 years with $90,000 down; loan 2: 6.25% for 30 years with $45,000 down and $200 extra | Loan 1 $2,395.09/mo and $502,232.03 interest; loan 2 $2,693.65/mo and $387,453.18 interest; difference $114,778.85 | A lower rate, smaller down payment, and $200 extra still beats the higher-rate 20 percent down case on interest. |
How to Compare Two Loans
- Enter loan 1 amount, annual rate, and term, plus optional down payment and extra principal.
- Enter the same fields for loan 2 from the competing offer.
- Calculate both monthly payments, both total interest amounts, and the interest difference.
- Judge whether you can afford the higher payment in exchange for lower lifetime interest.
- Change one input, such as extra principal, to see how the gap moves.
Loan Comparison Calculator FAQ
Does a positive interest difference mean loan 1 is worse?
It means loan 1 accrues more total interest than loan 2. You still need to compare monthly payment, cash required at closing, and how long you will keep the loan.
Are down payments required?
No. Leave them blank to treat the full amount as principal. The down payment cannot consume the entire amount.
Do extras include the scheduled payment?
No. Extra monthly payment is additional principal on top of the formula payment. The displayed monthly payment already includes that extra.
Are closing costs included?
No. Origination fees, points, and title costs are outside the interest totals. A slightly higher rate with no points can still be cheaper in cash.
Can I compare a 15-year loan with a 30-year loan?
Yes. That is a common use of the loan comparison calculator. Expect a higher payment and lower total interest on the shorter term if rates are similar.