Loan Comparison Calculator – Compare Loan Offers Side by Side
IndiaThe lowest advertised rate is not always the cheapest loan. Enter two or three offers with their fees, and see the EMI, total cost and effective rate of each, with a plain verdict on which one actually costs you less.
By Ramanathan · RBI disclosure rules last verified: October 8, 2026
- No Data Stored
- 100% Free Forever
- Fees Counted in Every Comparison
How the rate is applied
How the rate is applied
How the rate is applied
Offer A is the cheaper offer
Its effective rate is 10.94%, against 11.58% for Offer B. Over the full 5 years it costs ₹12,582 less in interest and fees.
Offer B advertises the lower rate, but its fees and charges (₹30,000 against ₹10,000) more than cancel it out.
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The effective rate counts the processing fee and other up-front charges as money you never receive. It is the fairest single number for comparing offers.
This comparison needs JavaScript to price each offer. Here is a worked example; enable JavaScript and reload to compare your own offers.
Example
₹10 lakh over 5 years. Offer A: 10.5% with a 1% fee, EMI ₹21,494, effective rate 10.94%. Offer B: 10.25% with a 2.5% fee and ₹5,000 of charges, EMI ₹21,370, effective rate 11.58%. Offer A is cheaper by ₹12,582 despite the higher rate.
HOW IT WORKS
How to compare loan offers
Two loans with almost the same interest rate can cost very different amounts, because the rate is only one of the things you pay for. Processing fees, insurance bundled into the loan, legal or documentation charges, and the way the rate is applied all add up. This calculator prices every offer the same way, so you can see the whole cost side by side.
For each offer it works out the EMI from the amount, rate and tenure, the total interest over the life of the loan, the fees and charges you pay up front, and the total cost, which is interest plus fees. It then calculates the effective rate: the interest rate at which your EMIs repay only the money you actually receive, after the fees have been taken. That is what the Reserve Bank of India's Annual Percentage Rate (APR) measures, and it is the number the calculator uses to decide which offer is cheaper.
Why the lowest rate can lose
The default example shows the trap. On ₹10 lakh over five years, Offer B advertises 10.25% against Offer A's 10.5%, so its EMI is ₹124 lower. But it charges a 2.5% processing fee plus ₹5,000 of other charges, ₹30,000 in all, against Offer A's 1% fee of ₹10,000. Count the fees and Offer B's effective rate is 11.58% against Offer A's 10.94%, and it costs ₹12,582 more over the loan.
The shorter the loan, the more fees matter, because they are spread over fewer months. On a long home loan the balance tips the other way. Take ₹30 lakh over 20 years: one bank offers 8.5% with a 0.5% fee, another 8.35% with a 1% fee and ₹10,000 of charges. Here the lower rate wins, at an effective 8.53% against 8.57%, and saves ₹43,186 over the loan, because 0.15 percentage points on a large balance for twenty years outweighs a one-time fee. The only way to know which way an offer tips is to count both.
Flat-rate offers
Some lenders quote a flat rate, which charges interest on the full original amount for the whole term even as you repay it. Set an offer to "Flat" and the calculator prices it that way. The example "Flat vs reducing rate" shows a 9% flat offer losing to a 14% reducing one over three years: the flat rate is really about 16.24% on a reducing balance. The loan interest rate calculator converts any flat rate for you.
When amounts or tenures differ
Total interest only compares fairly when the amount and tenure are the same. A longer loan always shows more total interest and a lower EMI, even at the same rate: over five years instead of three, ₹5 lakh at 12% costs ₹69,475 more in interest while the EMI drops from ₹16,607 to ₹11,122. The effective rate stays fair across different amounts and tenures, so the verdict uses it, and the calculator says so when the totals cannot be compared directly.
Where to find the figures
Since the RBI's April 2024 circular on the Key Facts Statement, lenders must give retail and MSME borrowers a Key Facts Statement that includes the Annual Percentage Rate, covering interest and all other charges, and the repayment schedule. Ask each lender for theirs before you decide: it lists the processing fee, insurance and third-party charges you need to enter here. Check too whether the rate is fixed or floating, since a floating rate can change after you sign.
QUESTIONS & ANSWERS
Loan comparison — frequently asked questions
Compare them on the effective rate, not the headline rate. Enter each offer's amount, interest rate, tenure, processing fee and any other up-front charges, and the calculator works out the EMI, total interest, total cost and effective rate for each. The offer with the lower effective rate is cheaper. On ₹10 lakh over five years, a 10.5% loan with a 1% fee (effective 10.94%) beats a 10.25% loan with ₹30,000 of fees and charges (effective 11.58%) by ₹12,582.
It is the annual cost of the loan once fees and charges are counted. Fees are paid up front, so you receive less than you repay interest on; the effective rate is the rate at which your EMIs repay only the money you actually received. In India, the RBI requires lenders to state the Annual Percentage Rate, covering interest and all other charges, in the Key Facts Statement given to retail and MSME borrowers.
No. Higher fees can outweigh a lower rate, especially on a short loan where the fees are spread over few months. On a long home loan the opposite often holds: on ₹30 lakh over 20 years, 8.35% with a 1% fee and ₹10,000 of charges beats 8.5% with a 0.5% fee by ₹43,186. Count both to know which way an offer tips.
A longer tenure lowers the EMI but raises the total interest, even at the same rate. On ₹5 lakh at 12%, a three-year loan has an EMI of ₹16,607 and a five-year loan ₹11,122, but the five-year loan costs ₹69,475 more in interest. Choose the shortest tenure whose EMI you can comfortably afford.
Set the offer to Flat and the calculator prices it the way a flat rate works, charging interest on the full amount for the whole term. A flat rate is much more expensive than the same number on a reducing balance: a 9% flat rate over three years is really about 16.24% a year, so it loses to a 14% reducing-rate offer.
Include everything you pay to get the loan: the processing fee, documentation or legal charges, and any insurance premium the lender adds to the loan. Prepayment penalties and late fees only apply in some situations, so leave them out of the comparison but check them in the loan agreement. The Key Facts Statement lists the charges for each offer.
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FURTHER READING
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Read the reasoning behind the numbers.