Loan Comparison

Compare two different loan offers to find the best option for you.

Loan 1

₹10,00,000
₹10,000₹1,00,00,000
8.5%
1%30%
5Yr
1Yr30Yr

Loan 2

₹10,00,000
₹10,000₹1,00,00,000
9.5%
1%30%
5Yr
1Yr30Yr

Understanding Comparing Loan Offers

Why Compare Loans?

When borrowing money, slight differences in interest rates or loan tenures can have a massive impact on the total amount you end up paying. Comparing two loans side-by-side allows you to identify exactly which option saves you the most money over the long term, rather than just looking at the monthly EMI.

Interest Rate vs. Tenure

A lower interest rate almost always saves you money. However, loan tenure is equally important. A loan with a longer tenure might offer a very attractive, low monthly EMI, but you will end up paying significantly more in total interest. Comparing the total interest paid is the true measure of a loan's cost.

Example Scenario

Consider borrowing ₹10,00,000. Bank A offers 8.5% for 5 years (EMI: ₹20,516, Total Interest: ₹2,30,993). Bank B offers 9.5% for 4 years (EMI: ₹25,123, Total Interest: ₹2,05,892). Even though Bank B has a higher interest rate and a higher EMI, you actually save ₹25,101 in total interest because you pay it off a year earlier.

Frequently Asked Questions

What is processing fee and should I compare it?▼
Yes! A processing fee is an upfront charge levied by the bank. Even if a loan has a slightly lower interest rate, a massive processing fee can make it more expensive overall. Always factor in all upfront fees.
What is the difference between flat rate and reducing balance rate?▼
A flat rate calculates interest on the entire original principal for the whole tenure. A reducing balance rate calculates interest only on the outstanding principal. Reducing balance is always much cheaper for the borrower.
Should I always choose the loan with the lowest total interest?▼
Generally, yes. However, if the loan with the lowest interest requires an EMI that is too high for your monthly budget, you might be forced to choose a longer-tenure loan with a lower EMI to ensure you don't default, even though it costs more in the long run.