Personal Loan Rate Comparison Calculator

This personal loan rate comparison calculator estimates the monthly payment and total interest for a fixed-rate loan using the amount, APR and term you enter. Change the APR or term to compare payment scenarios; the results do not include lender fees or predict an offer or approval.

Formula

The calculator compares loan scenarios by calculating a level monthly payment and the interest paid over the full term. It uses the standard amortizing-loan payment formula:

Payment = round(P × r / [1 − (1 + r)⁻ⁿ], 2)

• P is the amount borrowed, in dollars.
• r is the monthly interest rate, calculated as APR ÷ 1,200. APR is entered as a percentage per year.
• n is the number of monthly payments, calculated as years × 12.

Total interest is calculated as monthly payment × n − P. Because the payment is rounded to cents before the total is calculated, the result reflects the displayed payment repeated for each scheduled month. A lender’s final payment or payoff figure can differ because of its own rounding and payment processing.

Worked Example

Using the defaults—$20,000 borrowed, 8% APR and a five-year term—the calculation is:

1. Convert APR to a monthly rate: 8 ÷ 1,200 = 0.0066667.
2. Convert the term to payments: 5 × 12 = 60 months.
3. Substitute into the payment formula: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰] = $405.53 per month, rounded to cents.
4. Calculate interest using the rounded payment: ($405.53 × 60) − $20,000 = $4,331.80.

For these inputs, the calculator displays a monthly payment of $405.53 and total interest of $4,331.80.

Assumptions

• The APR and payment remain fixed throughout the scheduled term.
• Payments are equal monthly payments, made at the end of each monthly period.
• Interest is modelled monthly at APR ÷ 12, with no separate daily-interest adjustment.
• Origination charges, other fees, taxes, insurance and late or missed payments are not included.

How to Compare Loan Rates

For a useful comparison, hold the amount borrowed and repayment term constant, then change the APR. This isolates how the rate affects the estimated payment and interest. To compare terms, keep the amount and APR fixed and change the number of years. A longer term generally spreads repayment across more months: that can reduce the scheduled payment while increasing the total interest under this model.

APR is a percentage measure associated with borrowing costs, but the calculator treats the APR you enter as the rate used in its monthly interest formula. A lender’s disclosure may account for fees or calculate the disclosed APR differently from the note rate. Therefore, calculator results are not a substitute for comparing the lender’s written figures for the same amount and repayment period.

• Use the same loan amount in each scenario. If one offer deducts a fee from the amount paid to you, distinguish the advertised loan amount from the net proceeds.
• Enter the APR and term shown in the lender’s actual disclosure, not a rate estimate or promotional example.
• Check whether the quoted payment includes only principal and interest, and note any separate charges or conditions.
• Compare total repayment and total interest as well as the monthly payment; a smaller monthly amount alone does not show the full cost.

What the Results Mean—and What They Leave Out

The monthly payment is the modelled amount due each month to repay principal and interest in equal installments. Total interest estimates the interest across all scheduled payments, not the total cash paid: add the original principal to the interest to get the modelled repayment total. For the default example, that is $20,000 + $4,331.80 = $24,331.80.

Actual loan terms may include an origination fee, a different payment schedule, variable interest, or other charges. A fee paid upfront may change the net amount received without changing the calculator’s principal input. If the rate can change, this fixed-rate calculation cannot forecast later payments. Entering a different APR can illustrate a hypothetical scenario, but it does not show that a lender will offer that rate.

Do not read the result as an affordability or approval assessment. The calculator does not evaluate income, existing debts, credit history, eligibility, lender pricing, or a household budget. Obtain exact payment and cost figures from the lender’s disclosure and compare the same borrowing amount and term.

Common Comparison Mistakes

• Comparing different terms: A payment for a three-year loan is not directly comparable with one for a five-year loan unless the difference in repayment time and total interest is considered.
• Confusing APR with a guaranteed rate: The APR entered is an assumption for arithmetic, not a prediction of an offer.
• Ignoring fees: The calculator has no fee input, so it cannot calculate net proceeds or a fee-inclusive borrowing cost.
• Overinterpreting cents: The displayed amount is rounded to the nearest cent; a lender’s schedule can vary slightly because of exact dates, rounding conventions, or a final adjusted payment.

Frequently Asked Questions

How do I compare personal loan rates?
Compare disclosed APRs using the same borrowing amount and term, then review the payment, total interest, fees and net proceeds shown in each lender’s documents. This calculator provides a rate-and-term estimate, not a lender offer.

Does a lower APR always mean a lower total cost?
Not necessarily. Fees and repayment length also affect borrowing cost. Compare the full written cost for equivalent amounts and terms rather than relying on APR or monthly payment alone.

Why does a longer loan term reduce the payment?
The principal is divided across more scheduled payments. Since interest accrues during the longer repayment period in this model, total interest can rise even when the monthly payment falls.

Does this calculator include loan fees?
No. It calculates principal and interest from the entered amount, APR and term. Check the lender’s disclosure for origination charges or other costs and how they affect the amount you receive.

Can I use the result to know whether I will be approved?
No. The calculation does not assess applications or lender criteria. Only the lender can provide its decision and exact loan terms.

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

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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 | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2