Calculator guide
Who this calculator is for
Borrowers trying to evaluate multiple loan offers, weighing different interest rates, upfront fees, and term lengths.
Determine which loan mathematically results in the lowest total cost of borrowing by factoring in all fees and applying custom repayment schedules.
Formula used
True APR is derived using an internal rate of return calculation that factors the net loan principal (Principal - Origination Fee) against the standard amortized monthly payments. Extra payments directly reduce the principal balance, accelerating the payoff timeline.
The calculator keeps the math visible so users can understand what changed when they adjust rate, time, contribution, tax rate or loan amount.
Example: Compare two $10,000 loans
How to get a useful result
For the best estimate, use realistic rates, verify lender or tax assumptions, and run at least one conservative scenario. This makes the page more useful than a bare calculator and helps visitors stay longer because they can compare outcomes instead of leaving after one number.
Frequently asked questions
The interest rate is the percentage of principal charged by the lender. The APR (Annual Percentage Rate) includes both the interest rate and any upfront fees (like origination fees), representing the true yearly cost of the loan.
Because the APR factors in the fees you pay to get the loan. If a loan has zero fees, the APR will perfectly match the interest rate. If there are origination fees, the APR will be higher.
It depends on how long you keep the loan. If you plan to keep the loan for its entire term, the low rate with high fees is usually cheaper. If you plan to pay it off early, the no-fee loan is often better because you aren't stuck paying the massive upfront cost. Use the calculator to compare them exactly.
An origination fee is an upfront charge by the lender to process your loan. It is usually deducted from your loan proceeds. For example, if you take a $10,000 loan with a 5% origination fee, the lender takes $500 and only deposits $9,500 into your account, but you still owe $10,000.
No. Extending the loan term (e.g., from 3 years to 5 years) will lower your monthly payment, making it feel more affordable month-to-month, but it will significantly increase the total amount of interest you pay over the life of the loan.
Usually, yes. By making extra payments, you reduce the principal balance faster, which means less interest can accrue. However, some lenders charge 'prepayment penalties' to discourage this, so always read your loan agreement.
It is a fee a lender charges if you pay off your loan before the scheduled term ends. Lenders do this to recoup the interest they expected to earn off of you. Fortunately, many modern personal and auto loans do not have prepayment penalties.
A 15-year mortgage will have much higher monthly payments but will save you tens or even hundreds of thousands of dollars in interest compared to a 30-year mortgage. You can use this calculator to see the exact difference in total cost.
Amortization is the process of spreading out a loan into a series of fixed payments. Early on, the majority of your payment goes toward interest. Toward the end of the loan, the majority goes toward paying down the principal.
Yes, mathematically speaking. This is known as the Debt Avalanche method. Paying off your highest APR debt first will save you the most money in total interest.
Applying for a loan causes a 'hard inquiry' which can drop your score by a few points temporarily. However, if you use the loan to pay off revolving credit card debt, your credit utilization will drop, which often causes your score to increase significantly.
It depends entirely on your credit score and current market conditions. Excellent credit (720+) might secure single-digit APRs, while bad credit might see APRs of 25% to 36%.
Most personal loans have fixed interest rates, meaning your monthly payment will never change. However, some lenders offer variable rates, which can fluctuate.
Sometimes. While interest rates are usually hard-coded to your credit profile, you can sometimes negotiate or ask the lender to waive the origination fee, especially if you have competing offers from other lenders.
A larger down payment reduces the total amount you need to borrow. This lowers your monthly payment, reduces your total interest cost, and sometimes qualifies you for a better interest rate because you represent less risk to the lender.
A balloon loan requires you to make smaller monthly payments for a few years, followed by one massive 'balloon' payment to cover the remaining principal at the end of the term. They are highly risky.
If you can get a consolidation loan with an APR that is significantly lower than the average APR of your current debts (like credit cards), consolidation is a smart move that will save you money.
Missing a payment will result in late fees. If you are more than 30 days late, the lender will report it to the credit bureaus, which will severely damage your credit score.
Buying with an auto loan means you eventually own the car and have equity. Leasing means you are essentially renting the car and will always have a car payment. Financially, buying and holding a car is much cheaper long-term.
Simple interest accrues daily based on your current balance, meaning if you pay early, you save money. Pre-computed interest calculates all interest upfront; even if you pay off the loan early, you might still have to pay the full interest amount.