Two loan offers are rarely easy to compare: a lower rate might come with a longer term or upfront fees that wipe out the saving. This calculator puts Loan A and Loan B side by side — monthly payment, total interest, fees and total cost — and tells you which is genuinely cheaper. It suits anyone weighing personal loans, car finance or mortgage offers.
How it works
Each loan is amortised independently with the standard fixed-rate payment formula:
M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1)
where P is the amount borrowed, r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the number of months (years × 12). From the monthly payment M the tool derives:
- Total interest = (M × n) − P
- Total cost = total interest + upfront fees
It then compares the two total costs and flags the lower one as the cheaper deal. Ranking by total cost — not by rate or monthly payment — is what catches the cases where a longer term or fees quietly make the “lower rate” loan more expensive.
Example
| Loan A | Loan B | |
|---|---|---|
| Amount | £15,000 | £15,000 |
| Rate | 5.9% | 6.4% |
| Term | 5 years | 4 years |
| Fees | £300 | £0 |
| Monthly payment | ≈ £289 | ≈ £355 |
| Total interest | ≈ £2,346 | ≈ £2,030 |
| Total cost | ≈ £2,646 | ≈ £2,030 |
Loan B has the higher rate and bigger monthly payment, yet its shorter term and zero fee make it about £600 cheaper overall — the kind of result a rate comparison alone would miss.
The calculator is privacy-first — both loans are computed entirely in your browser and nothing leaves your device.