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Loan Comparison

Compare up to 3 loan scenarios side by side. See which loan costs less in total interest and find the best deal.

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Loan comparison calculator. Compare up to 3 loan offers side by side.
A loan comparison calculator evaluates multiple loan offers simultaneously, showing monthly payments, total interest, and total cost for each option. It supports both fixed-payment and decreasing-payment amortization methods so you can identify the cheapest loan across different terms, rates, and repayment structures.

What Is a Loan Comparison Calculator?

A loan comparison calculator is a financial tool that lets you compare up to 3 loan offers side by side, instantly showing the monthly payment, total interest, and total cost of each option so you can identify the best deal. It eliminates guesswork by putting hard numbers next to each offer in a single view.
When you receive multiple loan offers from different lenders, the differences can be subtle but expensive. A $25,000 personal loan at 10.5% APR for 4 years costs $4,530 in total interest, while the same amount at 9.2% for 5 years costs $4,843 — the lower rate actually costs $313 more because of the longer term. A loan comparison calculator reveals these hidden trade-offs instantly.
Unlike most comparison tools that only support fixed-payment (French amortization) loans, this calculator also handles decreasing-payment (linear amortization) loans. You can even compare loans using different amortization methods against each other — for example, a fixed-payment auto loan from one bank versus a decreasing-payment offer from a credit union — to see which truly costs less over the full term.

How to Compare Loan Offers Step by Step

Comparing loan offers requires looking beyond the monthly payment or the interest rate in isolation. Here is how to evaluate multiple loans systematically:
1. Gather the key details for each loan: the principal amount, annual interest rate (APR), loan term in years or months, and the amortization method (fixed payment or decreasing payment).
2. Calculate the monthly payment for each loan. For fixed-payment loans, use the standard amortization formula. For decreasing-payment loans, divide the principal by the number of months and add the declining interest.
3. Calculate the total interest for each loan by summing all interest payments over the full term, or by subtracting the principal from the total amount repaid.
4. Calculate the total cost by adding the principal plus total interest plus any fees (origination fees, service charges).
5. Compare all three metrics side by side: monthly payment, total interest, and total cost. The loan with the lowest total cost is generally the best deal, unless your priority is minimizing monthly cash outflow.
For example, suppose you are comparing three personal loan offers for $20,000. Offer A is 11.5% APR for 3 years (fixed payment), Offer B is 9.8% APR for 5 years (fixed payment), and Offer C is 10.2% APR for 4 years (decreasing payment). The monthly payments are $660, $424, and $555 (first month, declining) respectively. But the total interest is $3,770, $5,446, and $4,165. Offer A costs the least overall despite having the highest monthly payment.

Loan Comparison Formulas

M=P×r(1+r)n(1+r)n−1M = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}
  • MM = The fixed monthly payment amount (French amortization)
  • PP = The loan principal (amount borrowed)
  • rr = The monthly interest rate (annual rate divided by 12)
  • nn = The total number of monthly payments
This formula calculates the fixed monthly payment for loans using French amortization (constant payment method). Each payment covers that month's interest plus a portion of principal, with the balance reaching zero after the final payment.
For decreasing-payment loans (linear amortization), each monthly payment is calculated as:
Mk=Pn+(P−P×(k−1)n)×rM_k = \frac{P}{n} + \left(P - \frac{P \times (k - 1)}{n}\right) \times r
Where k is the payment number (1 through n). The first term is the constant principal portion, and the second term is the interest on the remaining balance, which decreases each month.
To compare loans fairly, calculate these metrics for each offer:
Total Interest (fixed)=M×n−P\text{Total Interest (fixed)} = M \times n - P
Total Interest (decreasing)=P×r×(n+1)2\text{Total Interest (decreasing)} = \frac{P \times r \times (n + 1)}{2}
Total Cost=P+Total Interest+Fees\text{Total Cost} = P + \text{Total Interest} + \text{Fees}
The loan with the lowest total cost is the best deal from a pure savings perspective. However, if cash flow is your priority, the loan with the lowest monthly payment (or lowest first payment for decreasing-payment loans) may be the better choice despite costing more overall.

Loan Comparison Examples

Comparing Two Personal Loan Offers: 3-Year vs. 5-Year Term

You receive two personal loan offers for $15,000. Offer A is 10.5% APR for 3 years. Offer B is 12.0% APR for 5 years. At first glance, Offer A has the higher monthly payment: $488 versus $334. But looking at total interest tells a very different story. Offer A costs $2,555 in total interest. Offer B costs $5,044 in total interest — nearly double. The total cost of Offer A is $17,555 versus $20,044 for Offer B. By choosing Offer A, you save $2,489 over the life of the loan, even though it has a higher rate per month. This illustrates why comparing total cost is more important than comparing monthly payments alone. If you can afford the higher payment, the shorter-term loan is almost always the better financial decision.

Auto Loan: Fixed Payment vs. Decreasing Payment

You are financing a $30,000 car at 6.93% APR for 5 years and your lender offers two repayment methods. With fixed payments (French amortization), you pay $593 every month for 60 months, totaling $5,596 in interest. With decreasing payments (linear amortization), your first payment is $673 but it drops each month, ending at $503 in the final month. Total interest with the decreasing method is $5,331 — saving you $265 over 5 years. The decreasing method requires more cash upfront (about $80 more per month in the first year), but the payments become progressively easier. If your income can handle the higher initial payments, the decreasing method saves money because you reduce the principal balance faster in the early months when interest charges are highest.

Three Credit Union Offers for Debt Consolidation

You want to consolidate $20,000 in credit card debt and receive three offers. Credit Union A: 8.5% APR for 3 years. Credit Union B: 9.5% APR for 4 years. Credit Union C: 10.2% APR for 4 years with decreasing payments. Plugging these into the comparison calculator: Credit Union A costs $631/month with $2,718 in total interest. Credit Union B costs $502/month with $4,119 in total interest. Credit Union C starts at $587/month (declining to $420) with $3,442 in total interest. Credit Union A is the cheapest overall, saving $1,401 compared to B and $724 compared to C. But if $631/month stretches your budget too thin, Credit Union C is a strong middle ground — $677 less total interest than B, and the payments become more affordable each month as the balance decreases.

Tips for Choosing the Best Loan Offer

  • Always compare at least 3 offers before signing. As of March 2026, personal loan rates in the US range from 6.20% to 36% APR depending on your credit score and lender. Even a 1-2 percentage point difference can save hundreds or thousands of dollars over the loan term.
  • Focus on total cost, not just monthly payment. A lower monthly payment usually means a longer term and more total interest. A $20,000 loan at 10% for 3 years costs $3,230 in interest, but the same loan for 5 years costs $5,496 — 70% more interest for just 2 extra years of smaller payments.
  • Compare APR, not just the interest rate. APR includes origination fees and other charges, giving you the true cost of borrowing. A 9% interest rate with a 3% origination fee might have an effective APR above 11%. Use APR for apples-to-apples comparisons.
  • Ask about the amortization method. Most US lenders use fixed payments (French amortization), but some credit unions and international lenders offer decreasing payments (linear amortization). The decreasing method costs less in total interest if you can afford the higher initial payments.
  • Check for prepayment penalties before committing. Some lenders charge fees for paying off your loan early. If you plan to make extra payments or pay off the loan ahead of schedule, avoid lenders with prepayment penalties.
  • Get prequalified with soft credit checks first. Many lenders let you check your rate with a soft inquiry that does not affect your credit score. Apply formally only after you have compared prequalified offers from multiple lenders.
  • Consider your cash flow, not just the math. The cheapest loan on paper is not always the best choice. If the monthly payment is too high relative to your income, you risk missed payments and late fees. Choose a payment that fits comfortably within 10-15% of your monthly take-home pay.

Frequently Asked Questions About Loan Comparison

How do I compare loan offers with different terms and rates?

To compare loans with different terms and rates, calculate three metrics for each offer: monthly payment, total interest, and total cost (principal plus interest plus fees). Enter each loan's amount, APR, and term into a comparison calculator to see the results side by side. The loan with the lowest total cost is generally the best deal, but also consider whether the monthly payment fits your budget. A $15,000 loan at 9% for 3 years costs $2,133 in total interest, while the same loan at 11% for 5 years costs $4,507 — the shorter-term loan saves $2,374 despite being on a tighter monthly budget.

Is a lower interest rate always the better loan?

No. A lower interest rate does not always mean a cheaper loan. The loan term matters just as much, and sometimes more. A 5-year loan at 9% APR can cost more in total interest than a 3-year loan at 11% APR because interest accumulates over a longer period. Additionally, fees like origination charges (typically 1-8% of the loan amount) can offset a lower rate. Always compare the total cost of each loan, not just the rate.

What is the difference between fixed-payment and decreasing-payment loans?

A fixed-payment loan (French amortization) has the same monthly payment throughout the entire term, making budgeting predictable. A decreasing-payment loan (linear amortization) has a constant principal portion each month, but interest decreases as the balance shrinks, so payments decline over time. The decreasing method always costs less in total interest because you repay principal faster. On a $25,000 loan at 8% for 5 years, fixed payments cost $4,166 in total interest while decreasing payments cost $3,400 — a savings of $766.

Should I choose the loan with the lowest monthly payment or the lowest total cost?

It depends on your financial situation. If your primary goal is to minimize what you pay overall, choose the loan with the lowest total cost — this is usually the one with the shortest term. If cash flow is tight and you need to keep monthly expenses low, a longer term with lower payments may be necessary even though it costs more in the long run. A good rule of thumb is to keep your loan payment below 10-15% of your monthly take-home pay while choosing the shortest term that fits that budget.

What factors should I compare besides the interest rate?

Beyond the interest rate, compare: APR (which includes fees), loan term length, origination fees (typically 1-8%), prepayment penalties, late payment fees, the amortization method (fixed vs. decreasing payments), and whether the rate is fixed or variable. Also consider the lender's reputation, customer service, and whether they report to all three credit bureaus. A loan with slightly better terms but poor customer service can cost you more in headaches and potential missed-payment fees.

How much can I save by choosing a shorter loan term?

The savings from a shorter term can be substantial. On a $20,000 personal loan at 10% APR, a 3-year term costs $3,230 in total interest versus $5,496 for a 5-year term — a savings of $2,266 (41% less interest). For a $30,000 auto loan at 6.93%, choosing 48 months instead of 60 months saves about $1,100 in interest. As a general rule, cutting 2 years off a loan term reduces total interest by 30-50%, depending on the rate.

Can I compare loans with different amortization methods?

Yes. Our loan comparison calculator lets you compare loans using different amortization methods side by side. You can compare a fixed-payment loan from one lender against a decreasing-payment loan from another to see which costs less overall. This is especially useful when comparing offers from traditional banks (which typically use fixed payments) with credit unions or European lenders (which may offer decreasing payments). Most other loan comparison tools only support fixed-payment loans.

What are current average loan rates in the US in 2026?

As of March 2026, average US loan rates are approximately: personal loans at 12.26% APR (for average credit), new auto loans at 6.93% APR (60-month term), and credit union personal loans at 10.64% APR (3-year term). Borrowers with excellent credit (740+ FICO) can qualify for personal loan rates as low as 6.20%, while those with poor credit may face rates of 25-36%. Getting prequalified with multiple lenders is the best way to find your actual rate.

Key Loan Comparison Terms

APR (Annual Percentage Rate)

The total annual cost of borrowing expressed as a percentage, including the interest rate plus lender fees such as origination charges. APR gives a more accurate picture of loan cost than the interest rate alone and is the best metric for comparing offers.

French Amortization

A loan repayment method where the monthly payment stays the same throughout the entire term. Also called the constant payment or annuity method. Each payment is split between interest (decreasing) and principal (increasing). This is the most common method for personal loans, auto loans, and mortgages in the US.

Linear Amortization

A loan repayment method where the principal portion of each payment is constant, but the interest portion decreases as the balance shrinks. This results in higher payments at the start that gradually decline. Also called the decreasing payment or constant amortization method. It always costs less in total interest than French amortization.

Total Interest

The cumulative amount of interest paid over the entire life of the loan. Calculated as the total of all payments minus the original principal. This is the true cost of borrowing and the most important metric when comparing loans of different terms.

Origination Fee

An upfront fee charged by some lenders for processing a new loan, typically 1-8% of the loan amount. This fee is usually deducted from the loan proceeds before disbursement. Origination fees increase the effective APR and total cost of the loan.

Prepayment Penalty

A fee some lenders charge if you pay off your loan before the scheduled end date. Not all loans have this penalty. Always check for prepayment penalties before making extra payments or refinancing.

Total Cost of the Loan

The complete amount you pay over the life of the loan, including the principal, all interest, and all fees. This is the single most important number when comparing loan offers because it accounts for differences in rate, term, and fees all at once.