Online loan cost comparison: simulate with our calculator and use one yardstick, the cost per 1,000 borrowed, to rank every offer.
Online lenders express prices differently: an APR including a deducted fee, an interest rate plus monthly charges, or a representative APR that may not be yours. Comparing them directly is confusing. This guide introduces a single yardstick, the cost per 1,000 borrowed over a given term, and shows how to calculate and use it with the simulator on this page.
Direct answer: work out the total amount you will repay, subtract the cash you actually receive and divide by the number of thousands borrowed. Over three years, an effective rate of 12% costs about 196 per 1,000, while 18% costs about 301. Lower is better, and the figure already includes every fee once calculated correctly.
The yardstick works because it ignores labels and focuses on money. Whether a lender calls its price an APR, a comparison rate or an interest rate with monthly fees, the cost per 1,000 shows how many units of currency each thousand borrowed will cost you. It also scales easily, so you can quickly estimate the cost of any loan size.
The usual mistake is comparing a figure that excludes fees with one that includes them. A lender advertising a low interest rate with a monthly fee may look cheaper than one quoting an APR, until both are converted. The cost per 1,000 removes that trap, provided you remember to include every single fee in the total repaid.
Next, you will see the calculation step by step, a reference table, how to convert each lender's format, a three-lender comparison, how term changes the yardstick, a routine with the simulator and frequent questions. Keep your quotes nearby, including any fees and the exact amount you would receive after deductions, so each conversion uses real figures.
The calculation step by step
- Find the total you will repay, including all fees.
- Subtract the cash you receive after any deducted fee.
- Divide the result by the amount received in thousands.
- The answer is the cost per 1,000 borrowed over that term.
Reference table over three years
Using P·r/(1−(1+r)^−n) for 1,000 over 36 months, the table shows the cost per 1,000 at several effective yearly rates. Use it to place any offer quickly.
| Effective yearly rate | Cost per 1,000 over 3 years |
|---|---|
| 9% | about 145 |
| 12% | about 196 |
| 15% | about 248 |
| 18% | about 301 |
| 24% | about 412 |
Converting each lender's format
| Lender | How the price is shown | How to convert |
|---|---|---|
| Happy Money (US) | APR including the deducted fee | Total repaid minus cash received |
| MoneyMe (Australia) | Interest rate plus establishment and monthly fees | Add all fees to the total repaid |
| Admiral (UK) | Personal APR, no extra fees reported | Total repaid minus amount borrowed |
The guides linked above explain each lender's rates in detail, from Happy Money's spread against card rates to MoneyMe's comparison rate and Admiral's quote decoder.
A three-lender comparison
Imagine three offers for about 10,000 over three years. A Happy Money offer at 16% APR, a MoneyMe offer at 12% interest with fees, giving an effective cost near 16.8%, and an Admiral quote at 15.9%. Converted, the costs per 1,000 are roughly 266, 279 and 264. The Admiral quote edges ahead despite its middle headline.
| Offer | Headline | Effective cost | Approximate cost per 1,000 |
|---|---|---|---|
| Happy Money | 16% APR | 16% | about 266 |
| MoneyMe | 12% interest plus fees | about 16.8% | about 279 |
| Admiral | 15.9% APR | 15.9% | about 264 |
How term changes the yardstick
The cost per 1,000 grows with the term, because interest runs longer. Always compare offers over the same term. If one lender offers only longer terms, calculate its cost for that term and compare it with the total cost of the other offers rather than with a figure for a shorter term.
Estimating from the reference table
Once you know an offer's effective rate, the reference table gives a fast estimate. An offer at about 15% over three years costs roughly 248 per 1,000, so borrowing 8,000 would cost around 1,980 in total interest and fees. If another offer at 12% would cost about 1,570, the difference of roughly 410 is the value of choosing well.
| Effective rate | Cost per 1,000 | Estimated cost on 8,000 |
|---|---|---|
| 12% | about 196 | about 1,570 |
| 15% | about 248 | about 1,980 |
| 18% | about 301 | about 2,410 |
Including early repayment plans
If you plan to repay early, the yardstick over the full term overstates your cost. Lenders without early repayment fees let you capture that saving. Simulate a shorter effective term to see your likely real cost, and favour offers whose terms allow overpayments without penalties.
Common conversion errors
- Using the amount borrowed instead of the cash received after a deducted fee.
- Forgetting monthly fees in the total repaid.
- Comparing a three-year cost with a five-year cost.
- Using the representative APR instead of your personal one.
Avoiding these four errors makes the yardstick reliable across any lender and any country.
A routine with the simulator
- Enter 1,000 as the amount and your term in months.
- Enter each offer's effective rate.
- Multiply the repayment by the months and subtract 1,000.
- Rank offers by the result.
- Multiply by the thousands you need to estimate total cost.
Using the yardstick with a partner
Couples comparing offers can each calculate the cost per 1,000 for the quotes they received individually and jointly. A joint application may receive a better rate thanks to combined income, or a worse one if either file has problems. The yardstick shows which route is cheaper in plain numbers, which makes the decision easier to discuss.
Write the figures in a shared note with the date, lender, term, effective rate and cost per 1,000, so both of you can see at a glance which offer leads.
Keep the reference table handy: once you know an offer's effective rate, the cost per 1,000 tells you in seconds whether it deserves a closer look or can be set aside immediately.
Summary: one yardstick for every offer
The cost per 1,000 borrowed turns different price formats into a single comparable number, as long as all fees are included.
- Include every fee in the total repaid.
- Use the cash actually received.
- Compare over the same term.
- Lower cost per 1,000 is better.
- Scale the figure to your loan size.
Frequently asked questions
Is this better than comparing APRs?
It complements APRs and is especially useful when fees are presented separately.
Does it work across currencies?
Yes, because it is a ratio, though each lender serves only its own country.
What about early repayment?
Repaying early lowers the actual cost, so lenders without early repayment fees can be cheaper in practice.
Should I ignore the headline rate?
Use it as a starting point, then confirm with the cost per 1,000.
Can I use the yardstick for credit cards?
Yes, if you simulate a fixed payoff plan, although card rates and minimum payments vary over time.
What cost per 1,000 is considered good?
It depends on your profile and the market, so compare several offers rather than relying on a fixed threshold.
Does a longer term ever win on this yardstick?
Only when compared with other offers over the same longer term, because cost per 1,000 always rises with time.
Conclusion
An online loan cost comparison based on cost per 1,000 borrowed cuts through different price formats. Simulate each offer with our calculator, include every fee, compare over the same term and use the Happy Money, MoneyMe and Admiral guides above before you choose.