Three offers, one honest ranking. Fees get folded into a true effective APR so a "low rate plus points" can't hide from a "higher rate, no fees."
| Offer | Payment | Total interest | Fees | Total cost | Effective APR |
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Effective APR answers: "what rate would a no-fee loan need to cost the same?" It's the fair way to compare offers with different fees. Total cost favors shorter terms; effective APR is term-neutral.
This loan comparison calculator ranks up to three offers honestly by folding fees and points into a true effective APR. That way a tempting low headline rate that hides costly points can't disguise itself as the better deal.
Each offer's fees and points are folded into its true effective APR — the rate that discounts the payment stream back to the actual cash you receive after fees. Comparing effective APRs, rather than headline rates, exposes when a tempting low rate bought with points is really the more expensive deal. The calculator also totals the lifetime cost of each offer.
Effective APR rolls a loan's fees and points into its interest rate, expressing the all-in annual cost so two offers with different fee structures can be compared directly.
Points and fees are upfront costs. A lower rate bought with points may still be more expensive overall, which effective APR exposes.
Compare effective APRs, not headline rates, and make sure the loan amount and term match. The calculator handles this automatically.
The interest rate is just the cost of borrowing the principal. APR folds in fees and points to express the all-in annual cost, which is why it's the fairer number for comparing offers.
Paying points to buy down the rate pays off only if you keep the loan long enough for the monthly savings to exceed the upfront cost. The effective-APR comparison captures this automatically.
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