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Loan Comparison Calculator

Compare multiple loans to find the best deal

Loan Comparison
Metric Loan 1 Loan 2

Why Compare Loans?

Comparing loans before borrowing can save you lakhs of rupees in interest payments. Different lenders offer varying interest rates, processing fees, and terms. Even a 0.5% difference in interest rate can result in significant savings over a 15-20 year loan tenure.

This loan comparison calculator helps you make informed decisions by comparing EMI, total interest, processing fees, and total cost side-by-side. Whether you're choosing between home loans, car loans, or personal loans, comparing options is crucial for financial health.

How to Use the Loan Comparison Calculator

  1. Enter Loan 1 Details: Amount, interest rate, tenure, and processing fee
  2. Enter Loan 2 Details: Same parameters for the second loan offer
  3. Compare Results: View side-by-side comparison of EMI, interest, and total cost
  4. Identify Better Option: Calculator highlights the more economical loan

EMI Calculation Formula

Where:

  • P = Principal loan amount
  • R = Monthly interest rate (Annual rate ÷ 12 ÷ 100)
  • N = Loan tenure in months

Total Cost = (EMI × Months) + Processing Fee

Key Factors to Compare

1. Interest Rate

The most obvious factor. Even 0.25% difference matters over long tenures. Check if the rate is fixed or floating.

2. Processing Fees

Banks charge 0.5-2% of loan amount as processing fee. Some offer zero processing fee promotions. Factor this into total cost.

3. Prepayment Charges

Check if the lender allows prepayment and if there are penalties. RBI mandates zero prepayment charges for floating rate home loans.

4. Loan Tenure

Longer tenure = Lower EMI but Higher Interest. Shorter tenure = Higher EMI but Lower Interest. Balance affordability with total cost.

5. Hidden Charges

Look for documentation charges, legal fees, valuation charges, and late payment penalties.

Understanding APR (Annual Percentage Rate)

APR includes the interest rate plus all fees and charges, giving you the true cost of the loan. A loan with 8% interest but high fees might have a higher APR than a 8.5% loan with low fees.

Fixed vs Floating Interest Rates

Fixed Rate

Pros: EMI remains constant, easier to budget, protection against rate hikes

Cons: Typically 0.5-1% higher than floating rates, no benefit if rates fall

Floating Rate

Pros: Lower initial rate, benefit from rate cuts, prepayment flexibility

Cons: EMI can increase if rates rise, uncertainty in budgeting

Negotiating Better Loan Terms

Loan Comparison Example

Scenario: ₹50 lakh home loan for 20 years

When to Refinance Your Loan

Consider refinancing if:

Related Calculators

Disclosure & Disclaimer: This calculator provides estimates for informational purposes only. Actual results may vary based on your specific circumstances, lender terms, and market conditions. Always consult with a qualified financial advisor before making investment or borrowing decisions. QuickCalculators is not responsible for any financial decisions made based on these calculations.

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Frequently Asked Questions

What factors should I compare when choosing a loan?
Compare EMI amount, total interest payable, processing fees, prepayment charges, and loan tenure. Also consider the lender's reputation, customer service, and flexibility in repayment.
Is a lower EMI always better?
Not necessarily. Lower EMI often means longer tenure, which results in higher total interest paid. Balance affordable monthly payments with minimizing total interest cost.
What is APR and why is it important?
APR (Annual Percentage Rate) includes the interest rate plus all fees and charges. It gives a true picture of loan cost. A loan with lower interest but high fees may have higher APR.
Should I choose a fixed or floating interest rate?
Fixed rates provide certainty in EMI amount, good when rates are expected to rise. Floating rates are typically lower and beneficial when rates are falling. Consider your risk tolerance and market outlook.
How can I negotiate better loan terms?
Maintain a good credit score (750+), compare offers from multiple lenders, negotiate processing fees, and consider balance transfer if you have an existing relationship with a bank.