Compare the interest rates

Compare the same sample loans. Note how the interest rate affects the total amount of interest paid.

Interest rate comparison 

Loan conditions Loan A Loan B
Loan amount $10,000 $10,000
Term 5 years 5 years
Interest rate 5% 15%
Monthly payment $188.77* $237.90*
Total interest over 5 years $1,236.92 $4,271.08

*Please note: the final month’s loan payment may vary from the regular monthly payment.

As for the interest rate, it’s important to shop around. Some lenders may give you a lower rate than others. In general, the shorter the term, the lower the interest rate.

By getting a 5% interest rate vs. 15%, this borrower would save over $3,000 interest over five years!

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