Loan Comparison Calculator — Compare Two Loans
Compare two loan offers side by side: enter the amount, annual rate, and term for each loan to instantly see monthly payments, total interest, and total cost — and find out which option saves you more money.
Loan A
%
months
Loan B
%
months
Loan B pays less total interest
- 1
Loan A monthly payment
P=200,000, r=5.5%, n=360 mo = 1,135.58 - 2
Loan A total interest
1,135.58 × 360 − 200,000 = 208,808.08 - 3
Loan B monthly payment
P=200,000, r=6.5%, n=300 mo = 1,350.41 - 4
Loan B total interest
1,350.41 × 300 − 200,000 = 205,124.3 - 5
Interest saved by cheaper loan
|208,808.08 − 205,124.3| = 3,683.78Loan B pays less total interest over its term.
How does this calculator work?
Both loans are solved with M = P·r·(1+r)^n / ((1+r)^n − 1). Total interest = M × n − P. Enter the principal, rate, and term for Loan A and Loan B to see monthly payments, total interest, and total cost for each — and which saves more money over the life of the loan.
Formula
How this is calculated
Both loans are evaluated using the standard amortisation payment formula M = P·r·(1+r)^n / ((1+r)^n − 1), where P is the principal, r the monthly interest rate (annual rate ÷ 1200), and n the number of monthly payments. Multiplying M by n gives the total amount paid, and subtracting the principal gives total interest — the true cost of borrowing.
The "interest saved" figure is the difference in total interest between the two loans and shows the long-run financial advantage of the cheaper option. Note that a loan with a shorter term typically has a higher monthly payment but substantially lower total interest — the table lets you weigh up the trade-off between affordability and lifetime cost.
This calculator assumes a fixed rate and equal payments for both loans, with no fees, insurance, or prepayment penalties. Real lenders typically quote an APR that bundles origination fees into the rate — use the APR rather than the nominal rate for the most accurate comparison.
Frequently asked questions
Interest accrues on the outstanding balance each month. A shorter term means each payment is larger (reducing the balance faster) and you pay interest for fewer months. For example, a $200,000 loan at 6% costs about $231,700 in interest over 30 years but only about $82,900 over 15 years — a saving of $148,800.
Not necessarily. A lower monthly payment often means a longer term and far more total interest paid. If your budget allows the higher payment, the loan with the higher monthly payment and lower total interest is usually the better financial choice — though always keep a comfortable cash-flow buffer.
Yes. The calculator handles different principals, rates, and terms for each loan independently. This is useful when comparing a larger loan at a lower rate against a smaller loan with different terms — for example, comparing a 95% LVR loan against an 80% LVR loan where you are putting in a larger deposit.
TG we-Calculate Editorial Team. (2026). Loan Comparison Calculator — Compare Two Loans [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/loan-comparison-calculator
TG we-Calculate Editorial Team. "Loan Comparison Calculator — Compare Two Loans." TG we-Calculate. 2026. https://we-calculate.com/calculator/loan-comparison-calculator.
TG we-Calculate Editorial Team, "Loan Comparison Calculator — Compare Two Loans," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/loan-comparison-calculator
@misc{wecalculate_loan_comparison_calculator, title = {Loan Comparison Calculator — Compare Two Loans}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/loan-comparison-calculator}}, year = {2026}, note = {TG we-Calculate} }
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