How this calculator works
Each offer uses its own APR, term, and fees to calculate monthly payment, total interest, and total dollars repaid. The lower-cost result is based on the assumptions entered.
Payment versus total cost
A longer term often produces a smaller payment while increasing interest. Fees can also make the lower-rate offer more expensive, so compare standardized disclosures rather than advertising alone.
Real-world example
A four-year loan at 8% may have a higher payment but a lower total cost than a five-year loan at 7.5%. Adding origination or documentation fees can change the winner again.
Common mistakes
- Comparing nominal rate rather than APR.
- Ignoring fees deducted from proceeds.
- Comparing different borrowed amounts.
- Forgetting prepayment penalties or variable-rate terms.
When to use this calculator
Use it for fixed-rate offers with the same amount borrowed. Review each official disclosure for fee treatment and features the estimate cannot model.
FAQ
Should I choose the lowest payment?
Not automatically. A longer term can lower the payment while raising total interest.
Should I enter APR or interest rate?
Use APR when comparing borrowing cost, but check whether entered fees are already reflected to avoid double counting.
Can this compare variable-rate loans?
No. It assumes the entered rate remains fixed for the full term.