How to compare loan offers

When comparing loan offers, look at three numbers together: the monthly payment (to judge whether it fits your income), total interest (the cost of borrowing), and the total cost — the payments plus fees. The golden rule: compare offers on the same loan amount, otherwise the comparison is unfair. The loan comparison calculator places two offers side by side and shows the cost difference directly.

An offer with a longer term gives a smaller monthly payment because the amount is spread over more months, but it pays more interest overall. And an offer with higher fees can look cheaper on interest while costing more in total. Always compare the total cost (payments + fees) as the primary criterion, then use the monthly payment to gauge affordability.

Using the same values as the calculator: a 50,000 dinar loan. Offer A at 6% per year for 5 years with 300 dinars in fees, and offer B at 7.5% per year for 5 years with no fees. Offer A’s payment is about 966.64 dinars and its cost about 58,298 dinars, while offer B’s payment is about 1,001.90 dinars and its cost about 60,114 dinars. The cost difference is about −1,815 dinars in favor of offer A, even though the monthly gap looks small.

You can compare two offers with different terms, but note that the longer term lowers the payment and raises total interest at the same time. Ask yourself: would I prefer a higher payment over a shorter period, or a lower payment over a longer one? The answer depends on your income and plans. If the offers have different loan amounts, run each separately and compare the rates and relative costs.

The comparison assumes a fixed interest rate and regular monthly payments, with the entered fees added to the total cost. Results are estimates and do not cover charges that may appear later, such as early-payoff fees or late penalties. Check each offer’s terms with the lender, including any hidden conditions, before making a final decision.