Offer A
12% · 36 mo · 5% fee deducted from proceeds
- Monthly payment
- $349.62
- Term
- 36 months
- Interest and fees
- $2,586.48
+$282.53 more
$1,622.70 if paid off at month 12
Tool · Offer comparison
Which offer really costs less?
A lower rate with a fee can cost more than a higher rate without one. Enter the cash you need and up to four offers. Every offer is sized so you receive the same amount, then compared on total cost and on what it costs to leave early.
Result
$10,000.00 in hand. Offer A: 12%, 36 mo, 5% fee deducted from proceeds. Offer B: 14%, 36 mo, no fee.
Offer B costs the least.$2,303.95 in interest and fees for $10,000.00 in hand. Offer A costs $282.53 more.
Offer B
14% · 36 mo · no fee
- Monthly payment
- $341.78
- Term
- 36 months
- Interest and fees
- $2,303.95
Lowest cost
$1,219.75 if paid off at month 12
For $10,000.00 in hand, Offer B costs the least over its full term: $2,303.95 in interest and fees. Offer A costs $282.53 more.
| Line | Offer A12% · 36 mo · 5% fee deducted from proceeds | Offer BLowest cost14% · 36 mo · no fee |
|---|---|---|
| Cash you receive | $10,000.00 | $10,000.00 |
| Fee | $526.32 | $0.00 |
| Amount on the note | $10,526.32 | $10,000.00 |
| Interest rate | 12% | 14% |
| Estimated APR | 15.61% | 14.00% |
| Monthly payment | $349.62 | $341.78 |
| Term | 36 months | 36 months |
| Total of all payments | $12,586.48 | $12,303.95 |
| Total interest | $2,060.16 | $2,303.95 |
| Cost if paid off at month 6 | $1,120.76 | $659.99 |
| Cost if paid off at month 12 | $1,622.70 | $1,219.75 |
| Cost if paid off at month 24 | $2,326.03 | $2,009.15 |
| Total cost over full term | $2,586.48 | $2,303.95 |
Cost of borrowing if you paid off after each month
Offer AOffer B
Show the math
Every offer is sized so you receive exactly $10,000.00. That is the only fair way to compare a fee against a rate. Offer A: 12% for 36 months, 5% fee deducted from proceeds Cash needed = $10,000.00 Note principal = ($10,000.00 + $0.00) ÷ (1 − 5%) = $10,526.32 fee deducted from proceeds Fee = $526.32 Monthly rate r = 12% ÷ 12 = 1% Payment = note × r × (1+r)^n ÷ ((1+r)^n − 1) = $10,526.32 × 0.01 × 1.430769 ÷ 0.430769 = $349.62 Total of payments = 349.6243 × 36 = $12,586.48 Total cost = $12,586.48 − $10,000.00 = $2,586.48 Estimated APR = the annual rate at which 36 payments of $349.62 are worth $10,000.00 today = 15.61% Cost at month 12 = 12 payments + remaining balance − cash received = $1,622.70 Offer B: 14% for 36 months, no fee Cash needed = $10,000.00 Note principal = $10,000.00 (no fee) Fee = $0.00 Monthly rate r = 14% ÷ 12 = 1.166667% Payment = note × r × (1+r)^n ÷ ((1+r)^n − 1) = $10,000.00 × 0.01166667 × 1.518266 ÷ 0.518266 = $341.78 Total of payments = 341.7763 × 36 = $12,303.95 Total cost = $12,303.95 − $10,000.00 = $2,303.95 Estimated APR = the annual rate at which 36 payments of $341.78 are worth $10,000.00 today = 14.00% Cost at month 12 = 12 payments + remaining balance − cash received = $1,219.75 Cost curve: after m payments, cost = payments made + balance still owed − cash received. The payment is kept unrounded inside the calculation and shown to the cent.
Questions to ask your lender
- Offer A: is the 5% fee taken out of the money I receive, or added to my balance? My comparison assumes it is deducted.
- What APR is printed on each offer's Truth in Lending disclosure, and does it include every fee? I estimate about 15.61% for Offer A and about 14.00% for Offer B.
- Is there any prepayment penalty? If I paid this off at month 12, what would the payoff amount be?
- Is the rate conditional on autopay or on opening an account, and what happens to the rate if I cancel?
Assumptions and limits
- Each offer is compared on the same cash in hand. An offer with a deducted fee is grossed up so you still receive the amount you need.
- Fixed rates, one payment a month, every payment on time and in full, no late fees or extra payments.
- Estimated APR comes from a regular-period cash-flow calculation on the terms you entered. The lender's disclosure is the authoritative figure.
- These are offers you typed in. We have no idea whether any lender would approve you for them, and we do not recommend one.
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