Two offers, side by side
Remaining balance over the life of each loan
Loan A costs $3,758 less in lifetime interest for these terms.
Your loan decision brief
Loan comparison verdict
Loan A: $20,000 at 7.5% over 5 years → $400.76/month, $4,046 total interest, $24,046 total repaid.
Loan B: $20,000 at 9.9% over 7 years → $330.99/month, $7,803 total interest, $27,803 total repaid.
Loan A wins on total cost, by $3,758 in interest
The trade-off: Loan A's shorter structure means Loan A costs $69.77 more per month than Loan B. A longer term always feels cheaper monthly and costs more in total - decide with the lifetime number, not the monthly one.
Before you sign anything
• Ask both lenders for the APR including all fees (the "all-in" APR) - origination fees can silently flip which loan is cheaper.
• Check the prepayment policy: a no-penalty loan lets you take the longer term for safety and still pay it like the shorter one.
• Get quotes within a 14–45 day window so the credit inquiries count as one shopping event on your score.
How the loan comparison calculator works
Both loans are amortized with the standard formula lenders use: a fixed monthly payment computed from the principal, the APR divided into a monthly rate, and the term in months. Each month, part of the payment covers interest on the remaining balance and the rest retires principal - which is why early payments are interest-heavy and the balance curve steepens near the end. The calculator runs the full schedule for both offers and compares them on the numbers that actually matter.
The trap in loan shopping is the monthly payment illusion: a longer term almost always looks cheaper per month while costing dramatically more over its life. A $20,000 loan at a lower rate over 7 years can easily cost more than a higher rate over 4. That's why the comparison leads with lifetime interest and total repayment - the numbers a lender's payment quote conveniently leaves out.
Side-by-side is deliberately the whole point of this tool: lenders rarely hand you two competing offers on one page, so the comparison you'd naturally make is against your own memory of numbers you saw days apart. Entering both offers here removes that gap - the cheaper monthly payment and the cheaper lifetime cost are almost never the same offer, and seeing both numbers at once is what prevents the wrong one from winning by default.
Frequently asked questions
- Should I choose the loan with the lower monthly payment?
- Only if cash flow genuinely requires it. Decide with the lifetime cost - monthly payment plus term length determines what you actually hand over. A longer term at the same rate always costs more in total.
- What's the difference between interest rate and APR?
- APR includes mandatory fees (like origination charges) annualized over the loan, so it's the more honest comparison number. Two loans with the same interest rate can have different APRs - always compare APR to APR.
- Can I pay a loan off early to save interest?
- Usually yes, and the savings can be large since extra payments attack pure principal. Check the prepayment policy first: a no-penalty loan lets you take a longer term for safety and pay it like a shorter one.
- Why do my lender's numbers differ slightly from this calculator?
- Lenders may use daily accrual, different rounding, or add fees into the financed amount. The monthly-compounding model here is the industry-standard approximation and typically lands within a few dollars of a lender's quote.
- How many loan offers should I compare before deciding?
- At least three, from different lender types (a bank, a credit union, and an online lender) if the loan size and timeline allow it. Rates for the same borrower can vary meaningfully across lenders, and a credit union in particular often beats bank offers on personal and auto loans.