Loan Comparison Calculator

What this calculator does. It puts two loan offers side by side — for example two personal loans, two car finance deals, or a new offer against your current loan — and shows which one actually costs less once you add up every monthly payment.

How the calculation works. For each loan we take the amount borrowed, the interest rate and the term in months, then apply the standard amortisation formula to work out a fixed monthly payment. Multiplying that payment by the number of months gives the total amount repaid; subtracting the original loan amount leaves the total interest cost. We then compare the two totals so you can see the real difference in pounds, not just in headline rates.

A worked example. Loan A is £10,000 at 7% over 3 years — about £309 a month and roughly £11,120 repaid in total. Loan B is £10,000 at 6% over 5 years — only £193 a month, but around £11,600 repaid overall. Loan B looks cheaper each month, but you'd actually pay about £480 more in interest because you're borrowing for longer.

How to read the results. Focus on "Total repaid" and "Total interest" rather than the monthly figure alone. A lower monthly payment often hides a longer term and a bigger interest bill. If both loans have similar totals, pick the one whose monthly payment best fits your budget and whose terms (early repayment, fees, flexibility) suit you.

Figures are illustrative. Real offers can include arrangement fees, insurance and variable rates that this calculator doesn't model.