Quick answer
A loan payment is M = P·i ÷ (1 − (1 + i)^−n), with total interest M·n − P. Comparing $200,000 at 6% for 30 years ($1,199.10 a month) with $200,000 at 5.5% for 15 years ($1,634.17 a month), the shorter loan costs far less interest overall.
Enter amount, APR and term for two loans. The calculator returns each payment, total interest and which is cheaper. Use this loan comparison calculator to check your own figures.
Related tools: Loan Calculator: Estimate your monthly loan payment, total interest and total cost. Auto Loan Calculator: Monthly car payment after down payment and trade-in. Amortization Calculator: Full amortization schedule with optional extra monthly payments.
How to use the Loan Comparison Calculator
- Enter loan 1 amount ($) (above 0).
- Enter loan 1 rate (APR) (%) (between 0 and 100).
- Enter loan 1 term (years) (between 0 and 50).
- Enter loan 2 amount ($) (above 0).
- Enter loan 2 rate (APR) (%) (between 0 and 100).
- Enter loan 2 term (years) (between 0 and 50).
- Press Calculate to see the result, and use Reset to start again.
| Input | What to enter | Allowed values |
|---|---|---|
| Loan 1 amount | A number, in $ | > 0 |
| Loan 1 rate (APR) | A number, in % | ≥ 0, ≤ 100 |
| Loan 1 term | A number, in years | > 0, ≤ 50 |
| Loan 2 amount | A number, in $ | > 0 |
| Loan 2 rate (APR) | A number, in % | ≥ 0, ≤ 100 |
| Loan 2 term | A number, in years | > 0, ≤ 50 |
Formula and method
Formula
M = P·i ÷ (1 − (1 + i)^−n); interest = M·n − P
IEEE-754 double precision; shown to at most 6 decimal places.
Fixed-rate loans with monthly compounding; fees are not included.
Worked examples
These examples are verified: each one is an automated test case that the live calculator must reproduce exactly.
Example 1
Inputs: Loan 1 amount = 200000; Loan 1 rate (APR) = 6; Loan 1 term = 30; Loan 2 amount = 200000; Loan 2 rate (APR) = 5.5; Loan 2 term = 15.
| Result | Value |
|---|---|
| Lower total interest | Loan 2 costs less interest |
| Loan 1 monthly payment | $1,199.10 |
| Loan 2 monthly payment | $1,634.17 |
| Loan 1 total interest | $231,676.38 |
| Loan 2 total interest | $94,150.04 |
| Interest difference | $137,526.33 |
Example 2
Inputs: Loan 1 amount = 350000; Loan 1 rate (APR) = 6.5; Loan 1 term = 30; Loan 2 amount = 350000; Loan 2 rate (APR) = 6.5; Loan 2 term = 30.
| Result | Value |
|---|---|
| Lower total interest | Equal interest |
| Loan 1 monthly payment | $2,212.24 |
| Loan 2 monthly payment | $2,212.24 |
| Loan 1 total interest | $446,405.71 |
| Loan 2 total interest | $446,405.71 |
| Interest difference | $0.00 |
The first line is the headline result (lower total interest). Below it the loan Comparison Calculator lists loan 1 monthly payment, loan 2 monthly payment, loan 1 total interest, loan 2 total interest and interest difference, which describe the same case from other angles. IEEE-754 double precision; shown to at most 6 decimal places.
Payment versus total cost
Loan 1 pays about $231,676 in interest over 30 years; Loan 2 about $94,151 over 15. The 15-year loan costs $435 more a month but saves over $137,000 in interest. Which suits you depends on cash flow.
Fair comparison
Interest is only comparable if the amounts match, as they do here. Fees and points are not included, so compare APRs for loans with different costs. A longer term lowers the payment but raises the total interest.
How the result changes with loan 1 amount
Holding every other input at the first worked example, this table changes only loan 1 amount. It shows how sensitive the answer is to that one value; each row was produced by running this calculator.
| Loan 1 amount | Lower total interest | Loan 1 monthly payment | Loan 2 monthly payment |
|---|---|---|---|
| 100000 | Loan 2 costs less interest | $599.55 | $1,634.17 |
| 200000 | Loan 2 costs less interest | $1,199.10 | $1,634.17 |
| 400000 | Loan 2 costs less interest | $2,398.20 | $1,634.17 |
| 800000 | Loan 2 costs less interest | $4,796.40 | $1,634.17 |
What happens with invalid input
These messages are produced by the calculator itself, so you know what to fix.
- Loan 1 amount: entering "0" shows "Loan 1 amount must be greater than 0." beside that field and no result.
- Loan 2 term: entering "0" shows "Loan 2 term must be greater than 0." beside that field and no result.
Choosing between the Loan Comparison Calculator and similar calculators
Each row shows what a related calculator on this site asks for and what it returns, so you can pick the one that matches your question.
| Calculator | You enter | It returns |
|---|---|---|
| [Loan Calculator](/finance/loan-calculator/) | loan amount, interest rate and term | Monthly payment |
| [Auto Loan Calculator](/finance/auto-loan-calculator/) | vehicle price, down payment and interest rate | Monthly payment |
| [Amortization Calculator](/finance/amortization-calculator/) | loan amount, interest rate and term | Monthly payment |
| [Interest Rate Calculator](/finance/interest-rate-calculator/) | loan amount, monthly payment and term | Interest rate (APR) |
| [HELOC Calculator](/finance/heloc-calculator/) | balance drawn, interest rate and draw period | Interest-only payment (draw period) |
Background: loans and mortgages
The interest rate is the cost of borrowing the principal; the APR also folds in certain fees, so a lower rate with high fees can have a worse APR. These calculators use the rate you enter and do not add fees, insurance or taxes, so add fees to the principal if you want to include them.
A fixed-rate loan is paid in equal instalments, early ones mostly interest. Extra payments go straight to principal, which shortens the loan and cuts interest; adjustable rates, escrow changes and prepayment penalties are not modelled.
Assumptions and limitations
- Interest is not comparable if the amounts differ
Results are estimates for planning, not financial advice. Lender terms, fees, taxes and rounding rules can change real figures, so confirm important numbers with your lender or a licensed adviser.
If a required value is empty, not a number, or outside its allowed range, the form marks that field with a message and shows no result instead of a misleading number. The automated checks deliberately try invalid entries for loan 1 amount and loan 2 term to confirm this.
Frequently asked questions
Is a shorter loan always better?
It saves interest but needs a higher payment.
Can I compare different amounts?
Totals are not comparable; compare payment and rate.
What about extra payments?
They cut interest; see the amortization tools.
What does the Loan Comparison Calculator calculate?
Compare the payment and total interest of two loans. It returns Lower total interest, Loan 1 monthly payment, Loan 2 monthly payment, Loan 1 total interest and Loan 2 total interest.
What formula does the Loan Comparison Calculator use?
M = P·i ÷ (1 − (1 + i)^−n); interest = M·n − P. Fixed-rate loans with monthly compounding; fees are not included.
What do I need to enter in the loan Comparison Calculator?
You enter Loan 1 amount ($), Loan 1 rate (APR) (%), Loan 1 term (years), Loan 2 amount ($), Loan 2 rate (APR) (%) and Loan 2 term (years).
How is the result rounded or limited?
IEEE-754 double precision; shown to at most 6 decimal places. Interest is not comparable if the amounts differ.
What is an example of a loan Comparison result?
With loan 1 amount 200000, loan 1 rate (APR) 6, loan 1 term 30, loan 2 amount 200000 and loan 2 rate (APR) 5.5, the lower total interest is Loan 2 costs less interest.
Where does the method come from?
The method follows: OpenStax, Principles of Finance (Rice University): time value of money, annuities and loan amortization.
Can I rely on this calculator for a decision?
Results are estimates for planning, not financial advice. Lender terms, fees, taxes and rounding rules can change real figures, so confirm important numbers with your lender or a licensed adviser. For this calculator in particular: Interest is not comparable if the amounts differ.
Related calculators
- Loan Calculator — Estimate your monthly loan payment, total interest and total cost.
- Auto Loan Calculator — Monthly car payment after down payment and trade-in.
- Amortization Calculator — Full amortization schedule with optional extra monthly payments.
- Interest Rate Calculator — Annual interest rate implied by a loan amount, payment and term.
- HELOC Calculator — Interest-only draw-period payment and the repayment-period payment of a home equity line.
- APR Calculator — Annual percentage rate of a loan once upfront fees are counted.
Sources
- OpenStax, Principles of Finance (Rice University): time value of money, annuities and loan amortization
Content last reviewed 2026-11-04. Formulas and worked examples are checked by automated tests against independently computed values.