Why You Can't Trust a Monthly Payment Comparison
Lenders sell loans based on monthly payment. "Only $2,100/month!" hides the fact that over 30 years, you'll pay back $756,000 on a $400,000 loan — nearly double the principal. The monthly payment is designed to feel manageable. The total cost of the loan is what actually matters.
The Loan Scenario Comparator shows you total interest paid, effective cost, and the full amortization schedule for up to 3 loan scenarios simultaneously.
The 5 Numbers You Must Compare Across Loan Offers
- Total interest paid: The most important number. Everything else is secondary.
- APR (Annual Percentage Rate): Includes fees; more accurate than interest rate alone.
- Loan term: Shorter terms mean higher monthly payments but dramatically lower total cost.
- Prepayment penalties: Some loans charge fees for paying down principal early — this negates the primary advantage of accelerated paydown.
- Points and origination fees: Upfront costs that affect the true loan cost.
The Extra Payment Strategy
On a $400,000 30-year mortgage at 7%: adding just $250/month extra to principal saves $96,000 in interest and eliminates 7 years of payments. The mathematics of this is stunning and counterintuitive. The Loan Scenario Comparator makes this visible by showing you the complete side-by-side amortization impact.
Business Loan Comparison: What Founders Should Know
For startup financing, the relevant comparison is between: SBA 7(a) loan (5–10 year terms, competitive rates), traditional bank term loan (1–5 year terms, strict requirements), and HELOC/personal loan (highest rates, most flexible). Model all three scenarios with the Loan Scenario Comparator before making any debt commitment.
Factor the resulting debt service into your burn rate using the Startup Burn Rate Calculator to confirm you can sustain the payments.