Loan Comparison Calculator

Loan 1 — Monthly payment

PMT = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1)

P=$25,000, r=0.5417%/mo, n=60 mo

= $489.15/mo

Month 1: 27.7% of first payment ($135.42) is interest — only $353.74 reduces principal. This front-loading is why early payoff saves disproportionately.

Standard amortization formula — FTC TILA (Regulation Z)

Loan 1 — Total interest

interest = (PMT × n) − principal

= ($489.15 × 60) − $25,000

= $4,349 interest (17.4% of principal)

Plus $250 origination fee (1%). Fee is paid upfront and reduces net proceeds, effectively raising your borrowing rate.

Loan 1 — Effective APR

Solve PMT × annuity(r_eff, n) = principal − fee for r_eff × 12

net_funded = $24,750, PMT = $489.15, n = 60

= 6.92% effective APR

Effective APR (6.92%) exceeds stated rate (6.50%) by 0.42% — the origination fee raises the true cost of borrowing above the stated rate. Use effective APR to compare offers with different fee structures.

Effective APR — Newton-Raphson IRR solve; TILA-required disclosure per Reg Z §1026.22

Loan 1 — True total cost

total_cost = (PMT × n) + origination_fee

= $29,349 + $250

= $29,599 all-in

All-in cost: $25,000 principal + $4,349 interest + $250 fee = $29,599.

Loan 2 — Monthly payment

PMT = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1)

P=$25,000, r=0.6042%/mo, n=48 mo

= $601.56/mo

Month 1: 25.1% of first payment ($151.04) is interest — only $450.52 reduces principal. This front-loading is why early payoff saves disproportionately.

Standard amortization formula — FTC TILA (Regulation Z)

Loan 2 — Total interest

interest = (PMT × n) − principal

= ($601.56 × 48) − $25,000

= $3,875 interest (15.5% of principal)

No origination fee on this loan.

Loan 2 — Effective APR

Solve PMT × annuity(r_eff, n) = principal − fee for r_eff × 12

net_funded = $25,000, PMT = $601.56, n = 48

= 7.25% effective APR

No origination fee, so effective APR equals stated rate (7.25%).

Effective APR — Newton-Raphson IRR solve; TILA-required disclosure per Reg Z §1026.22

Loan 2 — True total cost

total_cost = (PMT × n) + origination_fee

= $28,875 + $0

= $28,875 all-in ✓ Best Deal

All-in cost: $25,000 principal + $3,875 interest + $0 fee = $28,875.

Loan 3 — Monthly payment

PMT = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1)

P=$25,000, r=0.4917%/mo, n=72 mo

= $413.14/mo

Month 1: 29.8% of first payment ($122.92) is interest — only $290.23 reduces principal. This front-loading is why early payoff saves disproportionately.

Standard amortization formula — FTC TILA (Regulation Z)

Loan 3 — Total interest

interest = (PMT × n) − principal

= ($413.14 × 72) − $25,000

= $4,746 interest (19.0% of principal)

Plus $500 origination fee (2%). Fee is paid upfront and reduces net proceeds, effectively raising your borrowing rate.

Loan 3 — Effective APR

Solve PMT × annuity(r_eff, n) = principal − fee for r_eff × 12

net_funded = $24,500, PMT = $413.14, n = 72

= 6.61% effective APR

Effective APR (6.61%) exceeds stated rate (5.90%) by 0.71% — the origination fee raises the true cost of borrowing above the stated rate. Use effective APR to compare offers with different fee structures.

Effective APR — Newton-Raphson IRR solve; TILA-required disclosure per Reg Z §1026.22

Loan 3 — True total cost

total_cost = (PMT × n) + origination_fee

= $29,746 + $500

= $30,246 all-in

All-in cost: $25,000 principal + $4,746 interest + $500 fee = $30,246. This is the most expensive option — $1,371 more than the best deal.

Best deal savings vs most expensive

savings = max_cost − min_cost

= $30,246 − $28,875

= $1,371 saved by choosing Loan 2

The cheapest offer saves $1,371 over the life of the loan compared to the most expensive. On identical principal, the difference is 100% from rate, term, and fee structure — highlighting why shopping loans is one of the highest-ROI financial decisions you can make.