Loan Comparison Calculator

Why compare total cost, not just the rate?

The cheapest loan is the one with the lowest total cost: all the interest over the tenure plus every fee paid up front, with 18% GST on the fees. Lenders compete on the headline rate, so a loan with a slightly higher rate and no processing fee is often cheaper than one with a lower rate and a high fee, especially on shorter loans.

How to compare two loan offers

Total cost = (EMI × number of months − loan amount) + processing fee × 1.18

The 1.18 adds the 18% GST charged on processing fees. Compare offers for the same amount and tenure, or the comparison is meaningless.

Personal loan example

₹5 lakh personal loan for 5 years:

Offer B has the higher rate but costs about ₹4,344 less.

Home loan example

On long loans, the rate matters more than the fee. ₹50 lakh for 20 years: Offer A at 7.50% with a ₹14,160 fee costs ₹46.81 lakh in total; Offer B at 7.40% with a 1% fee (₹59,000 with GST) costs ₹46.53 lakh, which is ₹28,403 less over the full term.

But B only pulls ahead after about 10 years. If you plan to prepay or close the loan within 5 years, A is cheaper by about ₹20,163. Decide on the fee and the rate together, based on how long you will really keep the loan.

What is APR on a loan?

APR (annual percentage rate) is the yearly cost of a loan including the processing fee and other charges, so it is the fairest single number for comparing offers. In Offer A above, the 10.5% rate becomes an APR of about 11.54%, because you receive ₹4,88,200 after the fee but repay EMIs on the full ₹5 lakh. RBI requires every lender to show the APR in the Key Fact Statement (KFS) before you sign.

Comparing different tenures

A longer tenure lowers the EMI but raises the total interest. On ₹5 lakh at 11%, a 3-year loan has an EMI of ₹16,369 and costs ₹89,297 in interest; a 5-year loan has an EMI of ₹10,871 but costs ₹1,52,273. Choose the shortest tenure whose EMI you can pay comfortably.

Should I transfer my loan to another bank?

Transfer when the interest you save over the remaining tenure is clearly larger than the cost of switching. On ₹40 lakh outstanding with 15 years left, moving from 8.65% to 7.65% saves about ₹4.18 lakh of interest. If the new bank’s processing fee, legal and valuation charges and stamp duty come to about ₹40,000, you are still ahead by about ₹3.78 lakh. Ask your current bank to match the rate first; it is often cheaper than moving.

Flat rate vs reducing rate

Never compare a flat rate with a reducing-balance rate directly. A flat rate charges interest on the full amount for the whole tenure, so 10% flat over 3 years costs about the same as 17.9% on a reducing balance. Convert every offer to a reducing rate or an APR first; the Simple Interest Calculator explains the flat-rate trap.

What else to compare

• Fixed or floating rate. A floating rate moves with the RBI repo rate; a fixed rate does not, but usually starts higher.
• Prepayment charges. None on floating-rate loans to individuals for non-business use; fixed-rate loans may charge.
• Bundled insurance. Some lenders add a policy to the loan. Add its premium to the fee to compare fairly.
• Other charges. Legal and valuation fees, stamp duty and documentation charges, all listed in the KFS.

When to use a different calculator

• Only need the EMI for one loan? Use the Personal Loan EMI Calculator or the Home Loan EMI Calculator.
• Planning to pay off early? Use the Loan Prepayment Calculator.
• Checking current home loan rates? Read Home Loan Interest Rates.