Skip to content

Compare Loans

Better offer Loan B saves you ₹0 in total cost
Loan A
Loan B
Loan ALoan B
Monthly EMI--
Total interest--
Fees--
Total cost--

Tip

Use this free Loan Comparison Calculator to compare two home loan, car loan or personal loan offers side by side. Enter the interest rate, tenure and fees for each offer to see the EMI, total interest and total cost, and find out which loan is truly cheaper.

Why compare loans?

Banks and lenders often advertise the lowest EMI or the lowest rate, but neither tells you the full story. A loan with a slightly lower rate can still cost more if it has higher processing fees. A loan with a lower EMI may cost lakhs more because it runs for more years.

The only fair way to compare is the total cost: all the interest you will pay plus all the fees.

How this comparison works

  • EMI is calculated with the standard formula: EMI = P × r × (1 + r)n ÷ [(1 + r)n − 1].
  • Total interest = EMI × number of months − loan amount.
  • Total cost = total interest + processing fees and other charges you enter.

The loan with the lower total cost is the better deal, as long as other terms such as prepayment and flexibility are similar.

Example: lower rate, higher fee

You need a ₹30 lakh home loan for 20 years and get two offers:

Loan ALoan B
Interest rate8.50%8.25%
Fees₹15,000₹30,000
Monthly EMI₹26,035₹25,562
Total interest₹32,48,327₹31,34,873
Total cost₹32,63,327₹31,64,873

Loan B charges double the fee, but its 0.25% lower rate saves much more over 20 years. Loan B is cheaper by about ₹98,450. On a long loan, the rate usually matters far more than a one-time fee.

The tenure trap

A longer tenure lowers your EMI, which feels comfortable, but you pay much more interest. Here is the same ₹30 lakh loan at 8.5%:

TenureMonthly EMITotal interest
15 years₹29,542₹23.18 lakh
20 years₹26,035₹32.48 lakh
25 years₹24,157₹42.47 lakh
30 years₹23,067₹53.04 lakh

Going from 20 to 30 years reduces the EMI by under ₹3,000 a month, but adds more than ₹20 lakh of interest. Choose the shortest tenure you can comfortably afford.

What else to compare besides EMI

  • Processing fee and other charges: include legal, valuation, documentation and any insurance that is bundled with the loan.
  • Type of rate: floating or fixed. Check which benchmark a floating rate is linked to and how often it is reset.
  • Prepayment rules: RBI rules do not allow banks to charge prepayment penalties on floating-rate loans taken by individuals. For fixed-rate loans and business loans, check the charges.
  • Spread over benchmark: for floating loans, a lower spread means you benefit more when rates fall.
  • Service and transparency: easy access to statements, quick response, and clear communication matter for 20 years.
  • Key Fact Statement (KFS): lenders must give you a KFS showing the annual percentage rate (APR) and all charges. Always ask for it and compare the APR.

Should you transfer your existing loan?

If your current home loan rate is much higher than what new borrowers get, a balance transfer to another bank can save money. Use this calculator with:

  • Loan A: your outstanding amount, your current rate and remaining tenure, with ₹0 fees
  • Loan B: the same amount and tenure, the new bank’s rate, and all transfer charges as fees

If Loan B saves a clear amount, also ask your current bank to reduce your rate first. Many banks agree to match the rate for a small conversion fee, which saves you the paperwork of switching.

Frequently asked questions

Is a lower EMI always better?

No. A lower EMI often comes from a longer tenure, which increases total interest. Compare the total cost of interest and fees, not just the EMI.

How much rate difference makes a balance transfer worth it?

It depends on your outstanding amount, remaining tenure and transfer costs. As a rough guide, a difference of 0.50% or more on a large loan with many years left is often worth checking. Use the calculator to see the exact saving.

Can I use this for car and personal loans?

Yes. The EMI formula is the same for home, car, personal and education loans. Just enter the amount, rate, tenure and fees for each offer.

What is APR and why does it matter?

APR (annual percentage rate) includes the interest rate and most fees, shown as a yearly rate. It gives a fairer comparison than the interest rate alone. Lenders must show it in the Key Fact Statement.

Related calculators