Loan Comparison Calculator
Compare two independent loan offers side by side — for example, two banks quoting different interest rates for the same amount, or the same lender offering a shorter tenure against a longer one — and see which one actually costs less in monthly EMI and total interest.
Fill in both loans and select "Compare Loans" to see your results here.
What is the Loan Comparison Calculator?
This calculator answers a common decision-making question: when you have two loan offers in hand, which one actually costs less? It takes the amount, interest rate, and tenure of two separate, independent loans — Loan A and Loan B — and works out the monthly EMI, total interest payable, and total payment for each, so you can see the full cost of both offers side by side before choosing one.
It is important not to confuse this with the EMI vs Prepayment Calculator, which compares two scenarios on the exact same loan — paying it off on the original schedule versus making a one-time lump sum prepayment partway through. That calculator has a single shared loan with two possible outcomes. This calculator is different: Loan A and Loan B are two genuinely separate offers, each with its own independent amount, rate, and tenure — for example, two banks quoting different rates for the same home loan amount, the same lender offering a 15-year term against a 20-year term, or two personal loan offers of different sizes altogether. There is no shared "base loan" between them the way there is in the prepayment comparison.
How to use this calculator
- Under Loan A, enter the amount, interest rate, and tenure exactly as quoted in that offer.
- Under Loan B, enter the amount, interest rate, and tenure quoted in the second offer.
- Select "Compare Loans" to see the verdict, each loan's monthly EMI, and a full side-by-side comparison table.
- Use the years/months toggle on either loan's tenure field independently — changing one loan's unit does not affect the other.
Formula
Each loan is calculated independently using the standard reducing-balance EMI formula: EMI = [P × r × (1 + r)^n] / [(1 + r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the tenure in months.
Neither loan's calculation depends on the other — Loan A's EMI and total interest are computed exactly as if Loan B did not exist, and vice versa. The comparison step simply places the two independent results next to each other.
Example
Suppose two banks both offer ₹25,00,000 over a 240-month (20-year) tenure, but at different rates. Loan A comes in at 8.5% p.a., giving a monthly EMI of ₹21,695.58 and total interest of ₹27,06,939.40 over the full tenure. Loan B comes in at 9.0% p.a. — just half a percentage point higher — giving a monthly EMI of ₹22,493.15 and total interest of ₹28,98,355.74. Loan A's EMI is ₹797.57 lower per month, and over the full 20-year tenure, Loan A saves ₹1,91,416.33 in total interest compared with Loan B. This is a striking illustration of how even a small, half-a-percentage-point rate difference compounds into a large sum over a long tenure — well worth negotiating over or shopping around for before signing.
Factors that affect the comparison
- Tenure differences can make the EMI comparison misleading. A longer tenure lowers the EMI but can raise the total interest payable, so two loans with very different tenures can have EMIs that suggest one thing while their total interest says another. Always check the Total Interest Payable and Total Payment rows, not just the Monthly EMI row.
- Small rate differences compound over long tenures. As the worked example above shows, even a 0.5 percentage-point gap in rate can add up to a large total-interest difference when spread across 20 years of monthly compounding. The longer the tenure, the more this matters.
- Processing fees and one-time charges are not included. This calculator compares EMI, total interest, and total payment based only on the amount, rate, and tenure entered. It does not account for processing fees, prepayment or foreclosure charges, or insurance add-ons, which can differ between lenders and change which offer is actually cheaper overall.
- Your priority — lower EMI or lower total cost — can point to different loans. If monthly cash flow is tight, the loan with the lower EMI may suit you better even if it costs more in total interest. If your budget can absorb a higher instalment, the loan with the lower total interest is usually the better overall deal.
- Fixed rates are assumed for the full tenure. If either loan has a floating rate that can reset, its actual cost may differ from what is shown here — re-run the calculator with updated rates whenever they change.
Frequently Asked Questions
A longer tenure almost always produces a lower EMI, because the same principal and interest are spread over more instalments — but a lower EMI does not mean a cheaper loan. Stretching a loan out also means paying interest for more months, which can raise the total interest payable well above a shorter, higher-EMI alternative. When two offers differ in tenure as well as rate, the Total Interest Payable and Total Payment rows in the comparison table are more decisive than the Monthly EMI row alone, since they capture the full cost rather than just the monthly burden.
Interest is charged every month on the outstanding balance for as long as the loan runs, so even a small rate difference compounds across every one of those months. For example, a ₹25,00,000 loan over 20 years at 8.5% p.a. costs about ₹27,06,939 in total interest, while the same amount and tenure at 9.0% p.a. costs about ₹28,98,356 — a gap of roughly ₹1,91,416 from just a 0.5 percentage-point difference in rate. The longer the tenure, the more months that small gap has to compound, which is why rate shopping matters most on long-term loans such as home loans.
This calculator compares EMI, total interest, and total payment based only on the loan amount, interest rate, and tenure entered for each loan. It does not include processing fees, prepayment or foreclosure charges, insurance add-ons, or other one-time costs that lenders may charge — and these can be different for each offer. A loan that looks cheaper on interest alone can end up costing more once a higher processing fee is added, so factor in the full fee schedule from each lender before deciding, not just the numbers shown here.
It depends on what matters more for your situation. If your monthly cash flow is tight and you need the smallest possible outgo each month, the loan with the lower EMI may be the better fit even if it costs more in total interest over time. If your monthly budget can comfortably absorb a higher instalment and your priority is minimizing the overall cost of borrowing, the loan with the lower total interest is generally the better choice. There is no single correct answer — the two priorities can point to different loans, so decide which one matters more to you before comparing the numbers.
The EMI vs Prepayment Calculator compares two scenarios on the exact same loan — paying it off on the original schedule versus making a one-time lump sum prepayment partway through. This calculator compares two entirely different loan offers, each with its own independent amount, interest rate, and tenure, such as two banks quoting different rates for the same amount or one lender offering a shorter tenure than another. Use the EMI vs Prepayment Calculator when you already have a loan and are deciding whether to prepay it; use this calculator when you are choosing between two separate loan offers before taking either one.
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Calculations are estimates based on the information entered. They do not include processing fees, prepayment or foreclosure charges, insurance add-ons, or other one-time costs that may apply to either loan, and actual lender terms may differ. This calculator is not a substitute for a formal loan quote from your lender. See our full disclaimer.