Loan Comparison Calculator

This calculator compares up to three loan options side by side using the standard amortization formula. Enter the loan amount, annual interest rate, and term for each option, and instantly see monthly payments, total interest, and total cost.

The amortization formula calculates your fixed monthly payment: M = P[r(1+r)ⁿ] / [(1+r)ⁿ−1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12).

The calculator highlights the best deal based on total cost — the option that costs you the least overall. This is often different from the option with the lowest monthly payment, because longer terms accumulate significantly more interest.

For example, a $50,000 loan at 7.5% for 5 years costs $10,155 in interest. The same loan over 10 years costs $21,495 — more than double the interest — even though the monthly payment is lower. This calculator makes those tradeoffs visible.

Comparing loan offers: When multiple lenders give you different rate and term combinations, this calculator shows which one actually costs the least overall.

Evaluating term length tradeoffs: See exactly how much more interest you'll pay for the convenience of lower monthly payments with a longer term.

Refinancing decisions: Compare your current loan terms against a refinancing offer. Factor in whether the total savings justify any refinancing fees.

SBA loan comparison: Small business owners often receive offers for SBA 7(a), SBA microloans, and traditional bank loans simultaneously. Compare them here to find the best fit for your cash flow and total cost.

Interest Rate vs. APR

The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus fees — origination charges, closing costs, and discount points — expressed as a yearly rate. APR gives a more accurate picture of total loan cost. When comparing offers from different lenders, always compare APR, not just the stated interest rate.

How Amortization Works

Amortization is the process of paying off a loan through fixed monthly payments. Each payment is split between interest (on the remaining balance) and principal reduction. Early payments are mostly interest; later payments are mostly principal. This is why prepaying a loan early — when the balance is highest — saves the most interest.

Total Cost Is What Matters

Monthly payment is important for cash flow, but total cost (principal + interest) is what determines the true expense of a loan. A 10-year loan at 6% may have lower monthly payments than a 5-year loan at 7%, but the total cost could be thousands more. Always compare total cost alongside monthly payment.

Common Small Business Loan Types

SBA 7(a) loans offer competitive rates and long terms (up to 25 years for real estate) but require extensive documentation. SBA microloans are smaller (up to $50,000) with simpler applications. Term loans from banks or online lenders offer faster funding but often at higher rates. Business lines of credit provide flexible borrowing but typically have variable rates. Compare the total cost of each option for your specific borrowing need.