How this calculator works
Each loan uses equal monthly payments and a nominal annual rate divided by twelve. Differences are Loan B minus Loan A: negative means B has the smaller value for that measure. Different borrowed amounts are not directly equivalent offers. Fees, insurance and taxes are excluded; no option is declared best.
The formula
Payment = P × r / (1 − (1 + r)^−n)
Total repayment = Payment × n
Total interest = Total repayment − P
Difference = Loan B − Loan A; r = annual rate / 1200; n = months.A quick example
Two 12,000 loans at 0%, over 12 and 24 months, have payments of 1,000 and 500. B − A is −500 per month, while both total repayments are 12,000.
How to use this calculator
- Enter amount, annual nominal rate and term in months for Loan A.
- Enter the same details independently for Loan B.
- Review the comparison table and signed differences, including any excluded fees separately.
A few common questions
Is the lower payment the cheaper loan?
Not necessarily. A longer term may lower the payment while increasing total interest.
Can I compare different loan amounts?
Yes, but remember the loans provide different amounts of money, so their totals are not like-for-like prices.
Are fees included?
No. Compare lender fees and other charges separately before making a decision.