Loan Comparison Calculator
Compare up to three loans side-by-side: monthly payment, total interest and total cost.
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Frequently asked questions
Is my data sent to a server?
What formula is used?
When should I use a loan comparison calculator?
What is the difference between the interest rate and the APR?
What is a limitation of this tool?
How do I interpret the 'total interest' figure?
I am new to borrowing — what should I know?
Can I use this calculator for mortgage comparisons?
What is a common borrowing mistake?
Does the calculator handle different currencies?
About Loan Comparison Calculator
Choosing between loan offers is rarely as simple as picking the lowest headline interest rate. Two loans with identical nominal rates but different terms, fees, or compounding conventions can have dramatically different true costs. The Annual Percentage Rate (APR) was specifically invented to capture this complexity: it expresses the total cost of credit — interest plus mandatory fees — as a single annualised percentage, allowing fair comparisons across products and lenders. Understanding the difference between a nominal interest rate and the APR is one of the most important financial literacy concepts for any borrower, whether they are comparing car loans, personal loans, or mortgages.
This calculator is most useful when you have received two or three concrete loan offers and need to decide between them. Common scenarios include comparing a bank loan with a credit union offer, evaluating whether a lower interest rate on a longer term actually saves money compared to a higher rate on a shorter term, or assessing whether paying an upfront origination fee is worth a reduced interest rate over the loan life. You can also use it to understand how even a small difference in APR compounds into a significant cost difference over multi-year loans.
All calculations run locally in your browser — no personal or financial data is ever transmitted to a server. Enter the principal, annual interest rate, term, and any one-off fees for each loan. The tool applies the standard fixed-payment amortization formula PMT = P × r / (1 − (1 + r)^−n), where r is the monthly rate and n is the number of monthly payments. One-off fees are added to the total cost figure to give a fair, all-in comparison. The monthly payment shown does not include the fee; the total cost figure does.
When reading the results, pay close attention to total cost rather than monthly payment alone. A lower monthly payment almost always means a longer term or lower rate — but it can mask a much higher lifetime cost. Also be aware that this tool assumes fixed interest rates throughout the loan term; for variable-rate loans, consider running several comparisons with different rate scenarios as a stress test. These results are for informational purposes only; consult a certified financial advisor or credit counsellor before signing any loan agreement.
Credit, APR, and the Long Battle for Transparent Lending
The concept of consumer lending regulation is surprisingly modern. For most of recorded history, lenders were free to charge whatever rates the market — or desperation — would bear. Usury laws existed in many cultures, including ancient Rome and medieval Europe, but they were frequently circumvented through creative contract structures. The idea that a borrower should receive a single, standardised, legally enforceable statement of the true annual cost of their loan only became law in the United States with the Truth in Lending Act of 1968, which mandated disclosure of the APR as a condition of issuing consumer credit.
The European Union followed with the Consumer Credit Directive, first adopted in 1987 and substantially revised in 2008, requiring all EU lenders to present a standardised Annual Percentage Rate of Charge (APRC) on any consumer credit agreement. The calculation methodology is harmonised across member states, which means that — at least in theory — a consumer can compare a loan from a bank in Portugal with one from a lender in Germany on equal footing. In practice, differences in national fee structures and insurance requirements still create complexity, but the APRC framework represents a major step toward financial transparency.
The phrase "total cost of credit" — the sum of all payments made over the life of a loan minus the amount originally borrowed — is now a required disclosure in many jurisdictions precisely because research consistently shows that consumers make better borrowing decisions when they see a single "total repayment" figure rather than just a monthly payment and an interest rate. Behavioural economists call this "salience": making the true cost visible at the moment of decision-making leads to measurably better outcomes, including less over-indebtedness and fewer defaults.