Loan Showdown
Two loan offers for the same amount. Pick the one that costs less in total, then see the real cost and the true yearly rate behind each.
Frequently asked questions
What is the difference between a flat and a reducing rate?
A flat rate charges interest on the full original amount for the whole term, even as you repay it. A reducing rate charges interest only on what you still owe. A flat rate's true yearly rate is roughly double the headline.
Is a processing fee part of the cost of a loan?
Yes. A fee is paid up front but costs you as much as extra interest. Add the fee to the interest to get the real price, and compare the true yearly rate (APR) across offers.
Why does a longer loan cost more in total?
A longer term lowers the monthly payment, but you pay interest for more years. A slightly higher rate over fewer years can cost far less overall.
What should I compare when choosing a loan?
Compare the true yearly rate (APR) and the total amount you will repay, not the headline rate or the monthly payment alone.
Is this financial advice?
No. It is an illustrative learning game with simplified offers.