Loan Payment Comparison Calculator
Compare different loan options side by side to find the best choice for your financial situation.
Loan 1
Loan 2
Disclaimer
This calculator is for informational purposes only and does not guarantee actual loan terms or payments. Results should not be considered financial advice. Always consult with a qualified financial advisor before making decisions about loans or other financial matters.
Loan Comparison Results
| Comparison | Loan 1 | Loan 2 | Difference |
|---|---|---|---|
| Monthly Payment | |||
| Total Payment | |||
| Total Interest | |||
| Payoff Time |
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About Our Loan Payment Comparison Calculator
Our Loan Payment Comparison Calculator is designed to help you make informed financial decisions by comparing different loan options side by side. Whether you're considering different mortgage terms, auto loans, or personal loans, this calculator gives you a clear picture of how each option impacts your finances both monthly and over the life of the loan.
Why Compare Loan Options?
Choosing the right loan can save you thousands of dollars over time. Small differences in interest rates, loan terms, or payment strategies can have a significant impact on your total payments and financial flexibility. This calculator makes it easy to see these differences clearly.
How Monthly Payments Are Calculated
The calculator uses the standard amortization formula for fixed-rate loans:
PMT = P × [r(1+r)^n] / [(1+r)^n - 1]
Where:
- PMT is the monthly payment amount
- P is the principal (loan amount)
- r is the monthly interest rate (annual rate divided by 12 and converted to decimal)
- n is the total number of payments (years × 12)
Key Features:
- Compare two different loan scenarios side-by-side
- Calculate monthly payments, total payments, and total interest
- See the impact of extra monthly payments on your loan
- Determine which loan saves you more money over time
- Get a clear recommendation based on your financial priorities
How to Use:
- Enter the loan amount, interest rate, and term for your first loan option
- Enter any extra monthly payment you plan to make (optional)
- Fill in the same information for your second loan option
- Click "Compare Loans" to see a detailed comparison
Understanding Your Results:
Monthly Payment: The minimum required payment each month (principal + interest).
Total Payment: The sum of all payments made over the life of the loan.
Total Interest: The total amount paid in interest over the life of the loan.
Payoff Time: How long it will take to pay off the loan, considering any extra payments.
Difference: The calculated difference between the two loans for each metric.
Benefits of Extra Payments
Making extra payments toward your loan principal can:
- Significantly reduce the total interest paid
- Shorten the loan term by months or even years
- Build equity faster (for mortgages and other secured loans)
- Provide greater financial flexibility in the future
Use this calculator to make smart, informed decisions about your loans and develop an effective repayment strategy that works for your financial situation.
Frequently Asked Questions
Should I always choose the loan with the lowest monthly payment?
Not necessarily. While a lower monthly payment may be easier on your budget, it often means paying more in interest over the life of the loan. A loan with a higher monthly payment but shorter term typically saves you money overall. The best choice depends on your financial situation, goals, and cash flow needs.
How much can I save by making extra payments?
Even small extra payments can lead to significant savings. For example, on a 30-year, $250,000 mortgage at 4% interest, adding just $100 extra per month could save you over $30,000 in interest and pay off your loan nearly 5 years earlier. Our calculator helps you see exactly how much you could save with your specific loan details.
Are there downsides to paying off a loan early?
There are a few potential downsides to consider. Some loans have prepayment penalties. Also, if you have other debt with higher interest rates, it may make more financial sense to pay those off first. Additionally, if you could earn a higher return by investing the money instead of making extra loan payments, that might be a better strategy. Always consider your overall financial picture.