Loan Comparison Calculator: How to compare loans

Written by / October 29, 2024

A loan comparison calculator is a tool that helps borrowers compare multiple loan options side-by-side, making it easier to evaluate factors like interest rates, loan terms, monthly payments, and the total cost of each loan. By inputting the details of each loan option, such as principal amount, interest rate, and loan term, the calculator displays a breakdown of payments, interest paid, and total cost, allowing users to determine which loan best suits their financial needs.

Loan 1

Loan 2

Amortization Schedule

Year Principal Interest Total Paid Balance

Amortization Summary

Loan Monthly Payment Total Payment Total Interest Payoff Date
`); printWindow.document.write(document.getElementById('amortization-schedule').innerHTML); printWindow.document.write(``); printWindow.document.close(); printWindow.print(); } function clearAmortizationSchedule() { const tbody = document.getElementById('schedule-table').getElementsByTagName('tbody')[0]; tbody.innerHTML = ""; } function clearSummaryTable() { const tbody = document.getElementById('summary-table').getElementsByTagName('tbody')[0]; tbody.innerHTML = ""; } function updateAmortizationScheduleView() { const loanId = document.getElementById('select-loan').value; if (loanId) { updateAmortizationSchedule(amortizationData[loanId]); } else { clearAmortizationSchedule(); } }

How a Loan Comparison Calculator Works:

  1. Input Loan Details: Users enter details for each loan they want to compare. This includes:
    • Loan Amount: The principal or amount borrowed.
    • Interest Rate: The annual percentage rate (APR) charged on the loan.
    • Loan Term: The duration over which the loan is repaid (in years or months).
    • Other Fees: Any additional costs like origination fees, one-time charges, or recurring fees.
  2. Calculate Monthly Payments: For each loan, the calculator uses the loan amount, interest rate, and term to compute monthly payments. Most calculators assume fixed-rate loans, where the payment remains constant over the loan term.
  3. Compute Total Interest and Cost:
    • Total Interest Paid: The calculator computes the total interest paid over the loan term, giving insight into how much the borrower will pay in addition to the principal.
    • Total Loan Cost: Adds the loan amount to the total interest and any fees, providing the complete cost of borrowing.
  4. Display Comparison Table:
    • A comparison table or chart displays key metrics for each loan, such as monthly payments, total interest, and total cost.
    • Loan apps Kenya comparison calculators provide visualizations (e.g., bar or pie charts) to illustrate differences in interest payments or total loan cost, making it easier to see cost disparities at a glance.