Loan Comparison Spreadsheet: Compare Payments and Costs

A loan comparison spreadsheet helps you compare estimated monthly payments and total interest across loan offers using the same loan amount and term. Enter the principal, annual percentage rate (APR), and term to calculate the monthly payment and total interest; use the results as a consistent starting point, not as a substitute for each lender’s written disclosure.

Formula

The calculator uses the standard fixed-payment amortizing-loan formula. It assumes equal monthly payments and a constant rate, with interest calculated monthly from the APR:

• Monthly payment: M = P × r / [1 − (1 + r)⁻ⁿ]
• Total interest: I = M × n − P
• Monthly rate: r = APR / 1,200
• Number of monthly payments: n = years × 12

P is the amount borrowed in dollars, APR is the annual percentage rate entered as a percentage, M is the monthly payment in dollars, I is total interest in dollars, and n is the number of monthly payments. The payment is displayed to the nearest cent. Total interest uses that rounded payment, so the result follows the calculator’s displayed-payment convention.

Worked Example

Using the calculator’s default inputs: P = $20,000, APR = 8%, and a 5-year term.

1. Convert APR to a monthly rate: r = 8 / 1,200 = 0.0066667, or about 0.66667% per month.
2. Convert the term to payments: n = 5 × 12 = 60 months.
3. Calculate the payment: M = 20,000 × 0.0066667 / [1 − (1.0066667)⁻⁶⁰] = $405.53, rounded to cents.
4. Calculate total interest using the rounded payment: I = $405.53 × 60 − $20,000 = $4,331.80.

These are estimates under the stated formula. A lender’s payment schedule can differ if the amount financed, rate calculation, payment dates, fees, or other loan terms differ.

Assumptions

• The interest rate remains fixed for the full term.
• Payments are equal, made monthly, and treated as end-of-period payments.
• Interest compounds monthly at APR divided by 12.
• Fees, taxes, insurance, private mortgage insurance, escrow, and other charges are not included.

How to Use a Loan Comparison Spreadsheet

To compare multiple offers, make one row per offer and keep the calculation method consistent. Enter each quoted principal, APR, and term into the corresponding row or calculator. If the loans have different amounts or repayment periods, the monthly payment alone does not show which one has the lower overall borrowing cost.

A useful spreadsheet can include these columns:

• Loan amount financed—not merely the advertised amount requested.
• APR and whether the rate is fixed or variable.
• Term in months or years, plus the number of scheduled payments.
• Estimated monthly principal-and-interest payment.
• Estimated total interest over the full term.
• Fees and other costs shown separately, with their timing and treatment noted.
• Any introductory period, balloon payment, or payment change that the basic formula does not model.

For example, the same $20,000 balance at the same rate can have a lower monthly payment over a longer term, while accruing more interest if payments continue for the full term. That is why it is useful to compare both payment and total interest, and to note the repayment period beside each result.

What a Spreadsheet Can and Cannot Compare

This formula is appropriate for a straightforward fixed-rate loan repaid in equal monthly installments, such as a basic installment loan. It is a mathematical estimate, not a full loan quote. A lender may calculate APR and payments under terms that include charges or timing conventions not represented here. Confirm the amount financed, payment schedule, rate type, and any required charges against the lender’s documents.

For a variable-rate loan, future payments may change when the rate resets, so one fixed APR cannot represent the whole repayment period. Interest-only periods, deferred payments, balloon balances, irregular payment dates, and extra payments also require a different schedule. A spreadsheet can model these cases if it has the relevant details, but this calculator does not.

Common Spreadsheet Errors

• Entering APR in the wrong form: Enter 8 for 8%, not 0.08. The calculator converts the percentage to a monthly decimal rate.
• Mixing years and months: This calculator expects years. A 60-month term is 5 years, not 60 years.
• Comparing unlike amounts: A quoted loan amount and the amount actually financed may differ if charges are added or paid separately. Use comparable figures and record any difference.
• Rounding too early: Keep full precision in intermediate spreadsheet cells, then round the displayed payment to cents. Small rounding differences can accumulate over many payments.
• Treating total interest as total cost: Interest excludes fees and other charges. Record those separately rather than assuming the interest figure includes them.

A common misconception is that the lowest monthly payment necessarily represents the lowest-cost loan. A longer term can reduce the scheduled payment while increasing the number of months during which interest accrues. Compare the duration and other charges alongside the payment, without treating one figure as a complete measure of cost.

Frequently Asked Questions

What should a loan comparison spreadsheet include?
At minimum, include the amount financed, APR, term, estimated monthly payment, and estimated total interest. Add separate fields for fees, variable-rate terms, and payment features that the basic calculation does not cover.

Does APR include every loan cost?
Do not assume that this calculator’s interest result includes fees or other charges. APR can be defined using costs beyond the interest rate, but the spreadsheet formula here uses the APR as a monthly rate and does not separately model charges. Check the lender’s disclosure for the precise figures and included items.

Why does a longer term reduce the monthly payment?
The same principal is divided across more scheduled payments. With interest accruing over the longer period, total interest can be higher even when the monthly payment is lower.

Can I compare variable-rate loans with this calculator?
Only as a limited illustration using one assumed rate. The result does not forecast future rate changes or payment resets; those depend on the loan’s terms and future rates.

Why does my lender’s payment differ from the spreadsheet?
The lender may use a different amount financed, include charges, use different payment dates or rounding, or apply terms that this fixed-rate formula omits. Compare the inputs and written payment schedule rather than adjusting figures to force a match.

The result is an estimate, and the lender’s disclosure gives the exact figures.

Related

• Bank Loan Comparison Calculator and Costs
• Auto Loan Kuwait Comparison Calculator
• Auto Loan Comparison Calculator: Compare Payments

in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2