Loan A
Loan B
A Loan A
B Loan B
Comparison Result
Total Cost Comparison
Loan A
| Mo. | Payment | Principal | Interest | Balance |
|---|
Loan B
| Mo. | Payment | Principal | Interest | Balance |
|---|
Compare two loan offers side by side
This calculator puts two loans next to each other so you can see what each one really costs. For Loan A and Loan B you set the amount, the annual interest rate, the term in years and the repayment type. It then shows the monthly payment, total interest, total repaid, an effective annual rate, and the first and last payments, followed by a verdict card, a bar chart of principal versus interest, and a month-by-month amortization table for both loans. Typical uses are weighing a 20-year against a 30-year mortgage, comparing two lenders’ quotes, or seeing how equal-principal repayment changes the total cost.
Results are estimates for general information and are not financial advice. A lender’s official schedule and disclosure documents are what count.
How to use it
- For each loan, drag the sliders or type exact values for Loan Amount, Annual Rate (%) and Term (Years). Typed amounts can go above the slider range, up to 10,000,000.
- Choose a Repayment Type: Fixed Payment (Equal Installment), where every monthly payment is the same, or Fixed Principal (Declining), where the same slice of principal is repaid each month and payments shrink over time.
- Press Compare Now (or Enter while in a field). Load Example fills in 1,000,000 at 4.9% over 30 years with fixed payments against the same amount and rate over 20 years with fixed principal.
- Read the result cards and the comparison card, then press Show Amortization to see payment, principal, interest and remaining balance for every month.
Formulas and assumptions
The monthly rate is r = annual rate ÷ 12 and the number of payments is n = years × 12. For fixed payments the page uses the standard amortization formula M = P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the loan amount. Each month, interest is the remaining balance × r and the rest of the payment reduces the balance. For fixed principal, each payment is P ÷ n plus interest on the remaining balance, so the Monthly Payment figure shows the first (largest) payment and the Last Payment row shows the smallest. Total interest is the sum of every month’s interest, and total cost is the amount borrowed plus that interest.
With the default values, Loan A (500,000 at 4.5% for 30 years) costs about 2,533.43 a month and 412,034 in interest, while Loan B (500,000 at 3.8% for 20 years) costs about 2,977.47 a month but only 214,592 in interest. The comparison card names the loan with lower total interest and shows the interest difference, that difference as a percentage of the larger interest total, and the gap between the two monthly payments.
The Effective Annual Rate is (1 + r)12 − 1, the yearly equivalent of compounding the nominal rate monthly; 4.5% becomes about 4.59%. It is not an APR: origination fees, points, broker or closing costs, mortgage insurance, taxes and any other charges are not included anywhere on this page. The model also assumes a fixed rate for the whole term, one payment every month, no extra or missed payments, and a rate above 0%. Amounts are shown with a “$” sign, but the maths works for any currency. Everything is calculated in your browser and nothing you enter is stored or sent.
Frequently asked questions
Is the loan with lower total interest always the better choice?
Not necessarily. If the loans have different amounts or terms, the one with less interest may have a much higher monthly payment, as in the default example. Check the Monthly Diff figure and whether that payment fits your budget; fees that this page leaves out can also change the ranking.
Why does fixed principal cost less interest than fixed payments?
Fixed principal repays the balance faster in the early years, and interest is charged on the remaining balance, so less interest builds up. The trade-off is higher payments at the start.
Why are my lender’s numbers slightly different?
Lenders may count interest by actual days rather than twelfths of a year, round each payment to the cent, set a first payment date that creates an odd first period, or add fees and insurance to the payment. Expect small differences even for the same rate and term.
Can I model extra payments or a variable rate?
No. Each loan uses one fixed rate for the full term with regular monthly payments. To see the effect of a shorter payoff, compare the same loan with a shorter term.