Personal Loan Interest Comparison Calculator

Compare the estimated monthly payment and total interest for two personal-loan offers by entering each loan’s amount, APR, and term. The calculator uses fixed-rate monthly-payment arithmetic; its results help show how rate and repayment length affect cost, but do not include lender-specific fees.

Formula

For each offer, the calculator finds the monthly payment using the standard fixed-rate amortizing-loan formula, rounds that payment to the nearest cent, then calculates total interest as total scheduled payments minus principal:

Monthly payment = round(P × r ÷ [1 − (1 + r)⁻ⁿ], 2)
Total interest = (monthly payment × n) − P
Difference = Loan 2 total interest − Loan 1 total interest

• P is the amount borrowed, in dollars.
• APR is the annual percentage rate entered as a percentage.
• r is the monthly rate, calculated as APR ÷ 1,200.
• n is the term in months, calculated as years × 12.

A positive difference means the entered Loan 2 has more calculated interest over its scheduled term; a negative difference means Loan 2 has less. This is a comparison of the values entered, not a prediction of an approval or a recommendation.

Worked Example

Using the calculator’s defaults: both principal amounts are $20,000; Loan 1 has an 8% APR and a five-year term; Loan 2 has a 10% APR and a five-year term. Each term is 60 monthly payments.

• Loan 1 monthly rate: 8 ÷ 1,200 = 0.0066667. Monthly payment before rounding: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰] ≈ $405.53.
• Loan 1 total interest: ($405.53 × 60) − $20,000 = $4,331.80.
• Loan 2 monthly rate: 10 ÷ 1,200 = 0.0083333. Monthly payment before rounding: $20,000 × 0.0083333 ÷ [1 − (1.0083333)⁻⁶⁰] ≈ $424.94.
• Loan 2 total interest: ($424.94 × 60) − $20,000 = $5,496.40.
• Difference: $5,496.40 − $4,331.80 = $1,164.60 more interest for Loan 2 under these inputs.

The calculation uses the rounded monthly payments in the totals, as shown. Actual final payments can differ slightly because lenders may adjust the last payment or use different payment dates and accrual conventions.

Assumptions

• Both loans have fixed APRs and equal monthly payments throughout the term.
• Payments are made monthly at the end of each period.
• Interest accrues monthly at APR divided by 12.
• Fees, taxes, insurance, late charges, optional products, and payment-date differences are not included.

How to Compare Personal Loan Interest

For a useful comparison, enter figures on the same basis. Use the amount you would actually borrow, the APR shown in the lender’s offer, and the repayment term in years. If the offers finance different amounts or have different terms, the interest difference reflects all those differences together; it does not isolate the effect of APR alone.

APR is intended to represent the yearly cost of borrowing as a rate and may account for certain required charges under a lender’s disclosure method. A quoted interest rate and an APR are not always the same figure. For an apples-to-apples estimate, use the APR for both offers and check the lender’s documents for any fees or charges that the calculator omits. Do not substitute an advertised rate for the specific rate in an offer.

Consider the payment and total interest together. A longer term commonly spreads repayment across more installments, which can reduce the scheduled monthly payment while increasing the number of months interest accrues. A shorter term can produce a larger monthly payment even when total interest is lower. This calculator makes those arithmetic effects visible; it does not assess a household budget or determine whether an offer is suitable.

What the Results Do—and Don’t—Show

Total interest is not the same as total loan cost when charges outside the modeled interest are present. For example, an origination charge paid upfront or deducted from disbursement can change the amount of money received, while a fee added to the balance can change the amount repaid. The calculator has no fee inputs, so compare the full written disclosures separately. Also confirm whether an offered payment is fixed, whether the APR can change, and whether extra-payment terms affect the schedule.

The difference output is directional: it subtracts Loan 1’s interest from Loan 2’s. It is not an amount saved unless the offers are otherwise comparable and all relevant costs are accounted for. If one offer has a different principal, term, or fee structure, label that clearly when interpreting the result. For a closer comparison, enter the actual terms and separately add disclosed charges to your own comparison.

Common Comparison Mistakes

• Comparing different terms as if only rates changed: term length affects both payment size and accumulated interest.
• Using the note rate for one offer and APR for the other: use consistent figures and verify what each number represents.
• Ignoring fees and net proceeds: the amount deposited may not equal the stated principal if a charge is withheld.
• Assuming every payment is identical to the cent: payment rounding and the final installment can create a small difference.
• Treating the result as a personalized decision: the output is arithmetic, not a budget, eligibility, or suitability assessment.

Frequently Asked Questions

How do I compare interest on two personal loans?
Enter each offer’s principal, APR, and term, then compare total interest and monthly-payment figures alongside the lender’s disclosed fees and conditions.

Is APR the same as the interest rate?
No. The interest rate measures the cost of borrowing the principal, while APR can incorporate certain required charges as reflected in the lender’s disclosure. Check the offer documents to understand each figure.

Why can a lower monthly payment cost more overall?
A longer term can spread payments over more months. Even if each payment is smaller, interest may accrue for longer, increasing the total paid over the schedule.

Does this calculator include origination fees?
No. It calculates interest from principal, APR, and term only. Review the written offer for fees and whether they are paid separately, added to the balance, or withheld from the proceeds.

Why might my lender’s total differ from this estimate?
The lender may use different payment dates, rounding, interest-accrual conventions, fee treatment, or a final-payment adjustment. The lender’s disclosure and payment schedule provide the applicable figures.

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

Related

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in p1 | Loan 1 amount | $ | 20000 | 1 | 100000000
in apr1 | Loan 1 APR | % | 8 | 0.01 | 100
in yrs1 | Loan 1 term | years | 5 | 0.0833 | 50
in p2 | Loan 2 amount | $ | 20000 | 1 | 100000000
in apr2 | Loan 2 APR | % | 10 | 0.01 | 100
in yrs2 | Loan 2 term | years | 5 | 0.0833 | 50
out int1 | Loan 1 total interest | $ | round((round(p1 * (apr1 / 1200) / (1 - (1 + apr1 / 1200) ^ -(yrs1 * 12)), 2) * yrs1 * 12 - p1), 2) | 2
out int2 | Loan 2 total interest | $ | round((round(p2 * (apr2 / 1200) / (1 - (1 + apr2 / 1200) ^ -(yrs2 * 12)), 2) * yrs2 * 12 - p2), 2) | 2
out diff | Difference in total interest (Loan 2 minus Loan 1) | $ | int2 - int1 | 2