Which of two loan offers costs less in total — and how do the monthly payments and total costs compare side by side?

Total cost is the most direct comparison metric when both loans serve the same borrowing need. Total cost equals all monthly payments across the full term plus any upfront fees. A loan with a lower monthly payment but a longer term may cost significantly more in total even at the same rate — the monthly payment is lower because the principal is spread over more periods, but each additional period adds another payment. When the loan amounts differ, the cost difference reflects both the different borrowing terms and the different principals; in that case, comparing cost per dollar borrowed (total cost divided by loan amount) is more informative than comparing absolute total costs.

A higher-rate loan with lower fees is cheaper in total when the fee saving exceeds the additional interest over the full term. The break-even depends on the loan amount, the fee difference, the rate difference, and the term. Shorter terms favor lower fees more strongly, because there is less time for the rate difference to compound. Longer terms favor the lower rate, because the interest saving accumulates over more periods. This calculator shows the total cost for both options at the inputs entered — a negative cost_difference means the higher-rate option with lower fees is cheaper at those specific inputs.

The monthly payment formula requires the periodic interest rate, which is derived from the stated (nominal) interest rate — not the APR. APR is a disclosure rate that includes fees in an annualized cost figure; it is useful for comparing lender disclosures but produces a slightly different payment than the stated rate does when plugged into the amortization formula. This calculator captures fees separately through the upfront_fees field, giving a transparent split between interest cost and fee cost. For an apples-to-apples comparison, enter the stated rate and enter all known fees into the upfront_fees fields.