How the loans are compared
Each payment uses the note rate divided by 12. The finance charge is the total of payments minus the money you receive, so it counts interest and the origination fee (Regulation Z §1026.4). The cheaper loan has the lower finance charge.
Each APR is worked out with the Regulation Z Appendix J method, so a fee raises a loan's APR above its note rate.
Worked example
Loan A is $15,000 at 11% for 4 years with no fee: $387.68 a month and a $3,608.78 finance charge. Loan B is $15,000 at 9.5% with a $750 fee: $376.85 a month, but a $3,838.66 finance charge and an APR of 12.23%.
Loan A saves $229.88 despite its higher rate, because Loan B's fee costs more than its lower rate saves.
Rate, fee or APR?
Compare APRs for loans with the same term. When terms differ, compare finance charges, because a longer loan can have a lower APR and still cost more.
What this calculator assumes
Fixed rates, equal monthly payments, fees deducted from the loan and no prepayment. Check whether a fee is deducted or added to the balance; adding it changes the payments.
Borrowing in the UK?
The country choices above the inputs open separate local pages. UK quotes give an APR that already includes fees and compounding. Choosing United Kingdom opens that page and resets the inputs; amounts are not converted.
For UK loan quotes, use the UK loan comparison calculator in pounds.
Inputs for the US compare loans calculator
Loan A: amount
The first offer's loan amount in US dollars, before any fee.
Loan A: interest rate
The first offer's note rate.
Loan A: term
How long the first offer runs, in years.
Loan A: origination fee
The first offer's fee taken out of the loan. Enter 0 if none.
Loan B: amount
The second offer's loan amount.
Loan B: interest rate
The second offer's note rate.
Loan B: term
How long the second offer runs.
Loan B: origination fee
The second offer's fee taken out of the loan.
CALCULATOR QUESTIONS
US compare loans calculator questions
How do I compare loan offers?
Compare the finance charge, the total cost in dollars including fees. For loans with the same term, the APR gives the same answer.
Is a lower interest rate with a fee better?
Only if the interest it saves is more than the fee. The calculator shows which way it goes for your offers.
Why does the fee raise the APR?
The fee comes out of the loan, so you get less money but make the same payments. The cost per dollar you receive goes up.
Do rate quotes hurt my credit?
Prequalification with a soft pull doesn't. Several hard inquiries for the same type of loan in a short period may count as one for some scoring models.