| Scenario | Income (monthly) | Other debts | Offer | Amount | Rate | Term | Monthly payment (approx.) |
|---|---|---|---|---|---|---|---|
| Starter budget | $2,500 | $300 | Offer A | $15,000 | 11.50% | 48 mo | $392 |
| Lower rate, longer term | $2,500 | $300 | Offer B | $15,000 | 10.90% | 60 mo | $326 |
| Short term, higher fee | $2,500 | $300 | Offer C | $15,000 | 12.40% | 36 mo | $501 |
- Periodic payment (amortized loan): PMT = r·L / (1 − (1+r)−n), where L is principal, r is periodic rate, and n is number of periods.
- Amortization schedule: each period Interest = Balance·r, Principal = Payment − Interest + Extra, and New Balance = Balance − Principal.
- Estimated APR with upfront fees: treat net proceeds as L − fees, then solve for the periodic rate that prices the payment stream (Newton iteration), and annualize.
- Affordability ratios: DTI = (Other Debts + Loan Payment) / Income and PTI = Loan Payment / Income using monthly equivalents.
- Enter your gross monthly income and your other monthly debt payments.
- Set your DTI/PTI limits and an optional monthly budget target.
- Choose a payment frequency that matches the offer terms.
- Enable the offers you want to compare, then fill each offer’s details.
- Press Compare Offers to see results above the form, plus amortization previews and export options.
Payment differences across terms
Using the example table, the 60‑month option is about $326 per month, while the 48‑month option is near $392—roughly 17% lower for the longer term. The 36‑month option rises to about $501 monthly, around 54% higher than the 60‑month payment. In practice, this can free roughly $66 monthly in the sample, but it also extends repayment by 12 months. The spread shows how term length shapes cash flow when amounts match.
Fees and net proceeds affect true cost
Upfront charges reduce the money you receive. If a $15,000 loan has 2% origination plus $200 other fees, upfront fees are $500 and net proceeds are $14,500. Net proceeds matter most when fees are deducted upfront. The calculator estimates APR by solving for the periodic rate that prices scheduled payments to those net proceeds. Comparing APR estimates with headline rates exposes fee‑heavy offers.
Affordability ratios keep comparisons realistic
Monthly equivalents are used for DTI and PTI so weekly, biweekly, and monthly offers compare consistently. DTI equals (other debts + loan payment) divided by gross income. PTI equals the loan payment divided by income. With default limits of 36% DTI and 18% PTI, an offer can be flagged as tight even with a lower rate.
Extra payments shorten payoff timelines
Extra payments apply to principal each period, reducing interest and the number of periods used. Adding extra lowers total interest, but raises the monthly equivalent with extra. The offer detail cards show revised payoff periods, updated total interest, and total cost including fees, letting you test a faster payoff plan.
Use multiple signals to choose the best offer
The comparison table provides a lowest total cost pick and a best affordability score pick. Total cost adds all payments from the schedule to upfront fees, capturing full cash impact. The score penalizes exceeding DTI, PTI, or a budget target, then adds a small rate penalty using the lowest APR estimate as baseline. Together, the signals support a balanced, data‑first decision.
1) What does the affordability score represent?
It is a 0–100 indicator that rewards lower payment pressure and fewer limit violations. Scores drop when DTI, PTI, or your budget target are exceeded, and when APR estimates are higher than the best offer.
2) How is the estimated APR different from the stated rate?
The stated rate applies to the loan balance. Estimated APR also reflects upfront fees by treating the net proceeds as the true amount received, then solving for the rate that prices the payment stream.
3) Can I compare offers with different payment frequencies?
Yes. The calculator converts each periodic payment into a monthly equivalent using payments-per-year. That monthly equivalent drives DTI, PTI, and budget checks so offers remain comparable.
4) Why does total cost change when I add extra payments?
Extra payments reduce the principal faster, which lowers future interest charges and can shorten the schedule. Total cost includes the updated paid amounts plus upfront fees, so it adjusts automatically.
5) What limits should I use for DTI and PTI?
Use the limits your lender or personal plan requires. If you are unsure, start with conservative thresholds and adjust until the monthly payment and remaining budget feel sustainable for your household.
6) What do the export buttons include?
The summary export includes key comparisons and your input assumptions. You can also export a full amortization schedule to CSV for each enabled offer from the export dropdown.