How do I compare two personal loans?

People type this into search every day: compare personal loans calculator.

The usual answer is the smaller monthly payment. When the terms differ, a longer loan can show a lighter month and a heavier total, and a fee paid on day one can erase a lower rate.

This page is a labeled comparison of offers you already have. It is not a lending offer, and it is not personalized financial advice.

Payment times months, then the fee

The personal loan comparison borrows the same principal on two fixed-rate loans. For each one it builds the standard amortizing payment, multiplies by the number of months, and adds the upfront fee.

principal × monthly rate × (1 + monthly rate)^n ÷ ((1 + monthly rate)^n − 1)

n is years times 12, rounded. The monthly rate is the annual rate divided by 12. Fees are cash, not financed. Early payoff and insurance are excluded. Those are the tool’s assumptions. The personal loan payment post walks a single loan with the same formula.

The tool prints the loan with the lower total cost. When the totals match, it keeps Loan A.

The CFPB’s installment-loan note describes a sum you pay back in fixed installments over a set time. Its fees page lists origination and other charges beside the interest. The APR note says APR folds those fees into one yearly percent so offers can be compared as percents. This calculator does not compute that APR. It leaves the fee in dollars and compares the cash you send back.

Interest in the examples below is the tool’s total, minus principal, minus the fee. Be careful with the rounded monthly payment. The total uses the full payment, so the cent-rounded payment times the months can land a few cents away from the total on the card.

Example 1: the published $20,000 pair

Here are the calculator defaults:

• amount borrowed: $20,000
• Loan A: 8.5% for 4 years, fees $300
• Loan B: 7.8% for 5 years, fees $650

Loan A is 48 months. Payment $492.97. Total $23,962.37.

Interest on A: 23962.37 − 20000 − 300 = $3,662.37

Loan B is 60 months. Payment $403.62. Total $24,866.98.

Interest on B: 24866.98 − 20000 − 650 = $4,216.98

The tool picks Loan A. The gap is $904.60.

B’s payment is 492.97 − 403.62 = $89.35 lighter every month. That lighter month runs for an extra year, and the fee is $350 higher. The total moves the other way.

First month on A. Interest: 20000 × 0.085 ÷ 12 = $141.67. Principal: 492.97 − 141.67 = $351.30. Interest is 28.7% of the payment. Principal is 71.3%.

First month on B. Interest: 20000 × 0.078 ÷ 12 = $130.00. Principal: 403.62 − 130.00 = $273.62. Interest is 32.2% of a smaller payment.

Remaining principal at each anniversary, scheduled payments only:

Example 2: same term, and the fee beats the lower rate

Both loans are $12,000 for 3 years.

• Loan A: 11%, fees $0. Payment $392.86. Total $14,143.13. Interest $2,143.13.
• Loan B: 9.5%, fees $400. Payment $384.40. Total $14,238.23. Interest $1,838.23.

Loan A wins by $95.11.

B’s rate saves 2143.13 − 1838.23 = $304.90 of interest. The $400 fee is larger than that saving, so the higher rate still has the lower total. The payment gap is only 392.86 − 384.40 = $8.46 a month. Over 36 months that is about $304.56, and the fee puts B behind.

Example 3: same rate, and the longer term costs more

Both loans are $20,000 at 9%, with a $200 fee.

• Loan A: 3 years. Payment $635.99. Total $23,095.81. Interest $2,895.81.
• Loan B: 6 years. Payment $360.51. Total $26,156.77. Interest $5,956.77.

Loan A wins by $3,060.97.

The payment drop is 635.99 − 360.51 = $275.48 a month. The interest almost doubles, from $2,895.81 to $5,956.77. Nothing else changed. The fee is $200 on both, so it cannot be the reason.

Example 4: the fee is the only difference

Both loans are $8,000 at 10% for 4 years.

• Loan A fees: $0. Payment $202.90. Total $9,739.23. Interest $1,739.23.
• Loan B fees: $450. Payment $202.90. Total $10,189.23.

The payments match. The totals differ by $450.00, which is the fee and nothing else. A comparison that looks only at the monthly number calls these loans equal. The tool calls A cheaper by the fee you pay up front.

Example 5: a 0% loan with a $400 fee

Both loans are $10,000 for 2 years.

• Loan A: 0%, fees $400. Payment 10000 ÷ 24 = $416.67. Interest $0.00. Total $10,400.00.
• Loan B: 6%, fees $0. Payment $443.21. Interest $636.95. Total $10,636.95.

Loan A wins by $236.95.

The zero rate is not free. You still send back the $400. It is cheaper here because B’s interest, $636.95, is larger than that fee. A’s payment is also lower, by 443.21 − 416.67 = $26.54. This pair does not have the “lower payment, higher total” trap. Example 1 does. Example 6 does, in the other direction.

Example 6: the higher payment is the cheaper loan

Both loans are $35,000.

• Loan A: 6.9% for 5 years, fees $800. Payment $691.39. Total $42,283.51. Interest $6,483.51.
• Loan B: 8.4% for 4 years, fees $250. Payment $861.04. Total $41,579.88. Interest $6,329.88.

The tool picks Loan B. The gap is $703.63.

B’s rate is higher, B’s payment is 861.04 − 691.39 = $169.65 higher, and B’s total is lower. The shorter term and the smaller fee do more than the rate difference. Interest is only 6483.51 − 6329.88 = $153.63 apart. Fees are 800 − 250 = $550 apart. 153.63 + 550 = 703.63, the whole gap.

If the month cannot hold $861.04, affordability is a second question. The calculator reports the lower total. On this pair that total is the heavier payment. Your other bills sit outside the tool.

Example 7: a $2,500 loan, where the fee is a large share

• Loan A: 15% for 2 years, fees $75. Payment $121.22. Total $2,984.20. Interest $409.20.
• Loan B: 12% for 3 years, fees $150. Payment $83.04. Total $3,139.29. Interest $489.29.

Loan A wins by $155.09.

B’s payment is 121.22 − 83.04 = $38.18 lighter. The fee is 150 ÷ 2500 = 6% of the amount borrowed, against 75 ÷ 2500 = 3% on A. On a small principal, a $150 fee is a different object than the $650 fee on the $20,000 default, which was 3.25% of principal. Read the fee as a share of what you receive, then look at the total anyway.

Example 8: 18% for two years versus 8% for five

Both loans are $15,000.

• Loan A: 18% for 2 years, fees $150. Payment $748.86. Total $18,122.68. Interest $2,972.68.
• Loan B: 8% for 5 years, fees $200. Payment $304.15. Total $18,448.75. Interest $3,248.75.

Loan A wins by $326.08.

The rate gap looks decisive in B’s favor, 18% against 8%. The term gap runs the other way, 24 months against 60. A’s interest is actually lower, by 3248.75 − 2972.68 = $276.07, and A’s fee is $50 lower. The payment you have to afford is the hard part of A: $748.86 against $304.15. A difference of $444.71 a month, for a total that is only $326.08 apart.

That is the comparison the single payment number cannot make. One offer asks for a much larger month and finishes sooner. The other asks for less each month and costs a few hundred dollars more over the whole term. The tool’s job is to print the lower total, which is A. Whether the month can hold $748.86 is a separate check, the same one Example 6 ran into.

The pairs next to each other

Open the personal loan comparison with the same principal on both rows, the rate and years from each disclosure, and the upfront fee as cash. Use the personal loan payment calculator when you only have one offer. The debt consolidation post is the version with more than one balance being rolled together. The student loan post uses the same amortization on a different loan.