How to compare loan offers
The lowest rate isn't always the cheapest loan. Compare the total cost of borrowing: all interest plus upfront fees.
Total cost = (Monthly payment × Months − Amount) + Fees
Example
$50,000 over 5 years: Loan A at 9.5% with $1,000 in fees costs $14,005.58. Loan B at 8% with $3,000 in fees costs $13,829.18.
What else to check
- Monthly payment vs. your cash flow. See the cash runway calculator.
- Prepayment penalties if you may pay early.
- Factor rates: convert them to APR before comparing.
Frequently asked questions
Should I compare APR or total cost?
Total cost, for the same amount and term. APR is useful too, but some lenders exclude certain fees from it.
What if the terms differ?
A longer term lowers the payment but usually raises total interest. Compare both rows.
Are fees financed?
This assumes fees are paid upfront. If they're added to the loan, add them to the amount instead.
Results are estimates for planning and are not financial, tax or legal advice. See our methodology.