THE NUMORIX GUIDE
How to use the Loan Comparison Calculator
Last reviewed September 14, 2026
What this calculator does
For each loan, the engine converts the annual percentage rate to a monthly decimal rate and uses the fixed-payment formula P = Lr(1+r)^n / ((1+r)^n - 1), where L is principal, r is monthly rate, and n is term years x 12.
Formula and method
For each loan, the engine converts the annual percentage rate to a monthly decimal rate and uses the fixed-payment formula P = Lr(1+r)^n / ((1+r)^n - 1), where L is principal, r is monthly rate, and n is term years x 12. A zero-rate loan uses principal / n. It rounds monthly payment to cents before multiplying by the number of payments for total paid, then subtracts principal for interest and compares Loan 1 total with Loan 2 total.
Variables and inputs
Enter a dollar amount, annual interest rate as a percent, and term in years for Loan 1 and Loan 2. Both loans are modeled as fully amortizing monthly schedules. Savings is Loan 1 total paid minus Loan 2 total paid, so a positive number means the Loan 2 scenario costs less under the entered assumptions.
Worked example
For two $250,000 loans over 30 years, Loan 1 at 6.5% has a rounded payment of $1,580.17 and total paid of $1,580.17 x 360 = $568,861.20. Loan 2 at 6.0% has a rounded payment of $1,498.88 and total paid of $539,596.80, so the displayed savings with Loan 2 is $29,264.40.
How to interpret the result
The comparison shows how principal, rate, and term affect monthly payment, total repayment, and modeled interest. Savings is meaningful only when the offers have comparable amounts and include the costs that matter for the decision.
Common mistakes to avoid
Enter 6.5 for a 6.5% annual rate rather than 0.065, and compare equal loan amounts when isolating a rate difference. Check term units carefully: the engine multiplies years by 12 and does not accept months separately.
Assumptions and limitations
The schedule assumes a constant rate, monthly payments, and no fees, points, taxes, insurance, prepayment, late charges, or variable-rate changes. Totals use the already rounded monthly payment, so they can differ slightly from a lender's unrounded amortization schedule. A negative savings value means Loan 2 is more expensive in this comparison.