Navigating loan options can be complex. Whether you're considering a mortgage, a car loan, or a personal loan, understanding the long-term financial implications of different interest rates and terms is crucial. The Side-by-Side Loan Calculator is designed to simplify this process by allowing you to directly compare the key financial metrics of two distinct loan scenarios. This tool helps you visualize how changes in loan amount, interest rate, and repayment period can impact your monthly payments, total cost of borrowing, and overall repayment amount.
How It Works: The Math Behind the Comparison
The calculator uses the standard formula for calculating the monthly payment (M) of an amortizing loan:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount
i = Monthly interest rate (Annual rate divided by 12, then by 100 to convert percentage to decimal)
n = Total number of payments (Loan term in years multiplied by 12)
Once the monthly payment is calculated for each loan option, the calculator determines:
Total Paid: This is calculated by multiplying the monthly payment by the total number of payments (n).
Total Interest Paid: This is the difference between the Total Paid and the original Principal loan amount (P).
The calculator then presents the results side-by-side and highlights the differences in monthly payments and total amounts paid between the two options, providing clear insights into which loan is more financially advantageous over its lifetime.
When to Use This Calculator
Mortgage Shopping: Compare offers from different lenders or evaluate different loan terms (e.g., 15-year vs. 30-year fixed-rate mortgage).
Auto Financing: Analyze different car loan options from dealerships or banks, considering varying rates and terms.
Personal Loans: Evaluate personal loan offers for debt consolidation, home improvements, or other significant expenses.
Financial Planning: Understand the impact of borrowing choices on your long-term budget and savings goals.
By using this Side-by-Side Loan Calculator, you can make more informed decisions, potentially saving thousands of dollars over the life of your loan and choosing the financing that best aligns with your financial situation and goals.
function calculateMonthlyPayment(principal, annualRate, years) {
if (isNaN(principal) || isNaN(annualRate) || isNaN(years) || principal <= 0 || annualRate < 0 || years 0) {
monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else {
monthlyPayment = principal / numberOfPayments; // Simple division if rate is 0
}
var totalPaid = monthlyPayment * numberOfPayments;
var totalInterest = totalPaid – principal;
return {
monthlyPayment: monthlyPayment,
totalPaid: totalPaid,
totalInterest: totalInterest
};
}
function formatCurrency(amount) {
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
function calculateAndDisplay() {
var loanAmount1 = parseFloat(document.getElementById("loanAmount1").value);
var interestRate1 = parseFloat(document.getElementById("interestRate1").value);
var loanTerm1 = parseFloat(document.getElementById("loanTerm1").value);
var loanAmount2 = parseFloat(document.getElementById("loanAmount2").value);
var interestRate2 = parseFloat(document.getElementById("interestRate2").value);
var loanTerm2 = parseFloat(document.getElementById("loanTerm2").value);
var result1 = calculateMonthlyPayment(loanAmount1, interestRate1, loanTerm1);
var result2 = calculateMonthlyPayment(loanAmount2, interestRate2, loanTerm2);
document.getElementById("monthlyPayment1").innerText = formatCurrency(result1.monthlyPayment);
document.getElementById("totalPaid1").innerText = formatCurrency(result1.totalPaid);
document.getElementById("totalInterest1").innerText = formatCurrency(result1.totalInterest);
document.getElementById("monthlyPayment2").innerText = formatCurrency(result2.monthlyPayment);
document.getElementById("totalPaid2").innerText = formatCurrency(result2.totalPaid);
document.getElementById("totalInterest2").innerText = formatCurrency(result2.totalInterest);
var paymentDifference = result1.monthlyPayment – result2.monthlyPayment;
var totalPaidDifference = result1.totalPaid – result2.totalPaid;
document.getElementById("paymentDifference").innerText = formatCurrency(paymentDifference);
document.getElementById("totalPaidDifference").innerText = formatCurrency(totalPaidDifference);
}