LOOK BEYOND THE MONTHLY PAYMENT
Loan comparison calculator
Compare two fixed-rate offers for the same cash borrowing need. See how the interest rate, term and fees affect monthly payments, lifetime cost and the cost if you repay at your chosen horizon.
TWO OFFERS. ONE CLEAR VIEW.
Compare your loan offers
A lower payment can come with a higher total cost. These are mathematical comparisons, not a lender recommendation or credit offer. APR, insurance, taxes, variable rates and prepayment penalties are not modeled.
Compare payments, interest and fees
The horizon cost assumes you repay the remaining balance at that point, with no penalty. It includes the full modeled fee. Remaining principal is shown separately; principal repayment is not itself a borrowing cost.
| Metric | Loan A | Loan B |
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When the smaller payment is not the cheaper loan
Compare the same $25,000 cash borrowing need over 36 and 60 months. A longer term can reduce the scheduled monthly payment while adding more interest over the full term. A fee paid upfront does not change the principal-and-interest payment; a financed fee increases the balance and also accrues interest.
Use the comparison horizon if you expect to refinance or repay early. For example, a lower interest rate with an upfront fee may take time to become less expensive than a higher rate without that fee. The tool compares the interest accrued by the horizon plus each fee; it does not assume that the monthly payment is all interest.
Method and assumptions
Monthly payment is P × r ÷ [1 − (1 + r)−n], where P is the loan principal including financed fees, r is annual interest divided by 1,200, and n is the term in months. At 0% interest, payment is P ÷ n.
Full-term borrowing cost is all scheduled interest plus the modeled fee. Cash outlay is all scheduled payments plus any separately paid upfront fee. Horizon cost is the interest accrued through the selected month plus the fee, assuming the remaining balance is repaid then. Calculations use unrounded scheduled payments; lenders may round each payment or use different interest conventions.
- The interest input is a nominal fixed annual interest rate, not APR. Entering APR here may double-count fees if you also enter them separately.
- Both offers fund the same cash borrowing need. Fee-withheld loans, balloon payments and variable rates require a different model.
- Taxes, insurance, optional products, late fees and early repayment penalties are excluded.
- A 0-month horizon compares the modeled fees before any scheduled interest accrues.
- This tool does not assess affordability, eligibility or whether a lender is suitable for you.
Reference: CFPB guidance on comparing payments, upfront costs and borrowing costs. This general fixed-rate model does not reproduce an official mortgage Loan Estimate or legal APR disclosure.
Frequently asked questions
Should I always choose the lowest payment?
No single metric answers that. Compare the term, interest and fees as well as whether the payment fits your budget. This tool reports each metric rather than assessing a loan's suitability.
What if I plan to keep the loan for less than its full term?
Set the comparison horizon to your planned repayment month. The remaining balance is the modeled amount still owed then. Check the lender's early repayment terms separately.
Can this compare mortgages?
It can compare the fixed principal-and-interest and fee component. It excludes property taxes, insurance, PMI, escrow and other closing costs unless you deliberately include an eligible cost in the modeled fee. Use the mortgage calculator for a broader monthly housing estimate.
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Formula and software checked October 28, 2026. Educational comparison only.