Compare offers for the same usable cash and repayment period before judging the note rate or payment. A withheld fee can make a lower-rate loan cost more. Keep the lender-disclosed APR separate from a payment model that uses the note rate and explicitly handles fees.
What numbers should you copy from each quote?
Record lender and quote date, face principal, note interest rate, APR, term, payment schedule, each required fee, net proceeds, total of payments, any collateral and prepayment conditions. Mark whether each figure is a conditional estimate or the final agreement. Do not place Social Security numbers, account details or application documents in a comparison worksheet.
This guide owns the written-offer comparison workflow. The loan comparison calculator is a scenario tool; reconcile its rate and fee assumptions with the actual lender disclosure.
Why does the same $10,000 face amount fail the comparison?
A $10,000 loan with a 5% withheld fee supplies $9,500, while a no-fee $10,000 loan supplies $10,000. If the bill requires $10,000 cash, the first quote leaves a $500 gap. Under a proportional withheld-fee assumption, principal needed = cash need / (1 − fee fraction). Here that is $10,000 / 0.95 = $10,526.32 before lender-specific cent adjustments. Availability of that larger principal is not assumed.
Worked comparison: equal $10,000 cash and 36 months
Both hypothetical offers deliver $10,000. Offer A charges a 12% note rate and a 5% withheld fee; Offer B charges a 14% note rate and no fee. Monthly amortization uses the note rate. The fee in A is already part of its larger repaid principal: it is not added a second time.
| Offer | Principal | Note rate | Withheld fee | Cash received | Payment | Total payments | Payments minus cash received |
|---|---|---|---|---|---|---|---|
| A: lower note rate, 5% withheld fee | $10,526.32 | 12% | $526.32 | $10,000.00 | $349.62 | $12,586.48 | $2,586.48 |
| B: no fee, higher note rate | $10,000.00 | 14% | $0.00 | $10,000.00 | $341.78 | $12,303.95 | $2,303.95 |
In this model, A costs $282.53 more over the scheduled term even though its note rate is lower. That difference is not a prediction about any lender. Compare the separately disclosed APR as well; this worksheet does not calculate the legally disclosed APR. For the fee mechanics, see origination fees.
What if the lower payment comes from a longer term?
Do not call the payment difference a saving until you compare the number of payments and total dollars. First hold term fixed to compare price, then compare the actual available terms against the household budget. The 36 versus 60 month dataset comparison isolates the term tradeoff. A longer term can be the only workable cash-flow choice and still be more expensive.
What makes two close quotes materially different?
- Cash timing: distinguish approval, completed verification, disbursement and receipt. Do not assume a deadline is met by an application.
- Collateral or cosigner: a small price difference does not erase a separate person’s liability or loss of pledged property.
- Optional products: identify whether an add-on is required, financed or cancelable, and how it changes the principal and payment.
- Early repayment: obtain the actual payoff conditions; scheduled interest is not necessarily the amount paid after an early payoff.
- Provider and servicing: verify which legal entity lends, which collects payments and where concerns go.
Method and limitations of this worksheet
The model assumes equal monthly installments, constant annual note rates, a proportional fee withheld at funding, no other charges and repayment to term. It retains calculation precision and rounds displayed outputs to cents; an actual lender may round the principal, fee and final payment differently. It is an educational comparison, not an available offer, underwriting rule or legal APR calculation. The CFPB APR explanation supports the rate distinction; its installment-loan fee guidance supports checking charges.
Sources supporting this explanation
- CFPB: APR includes interest and additional loan fees; distinguish the note rate from APR
- CFPB: personal installment loans, charges and disclosure review
Sources checked 2026-10-28. Examples are hypothetical BYL calculations or planning worksheets;they are not observed lender prices,offers or approval criteria.