Loan Comparison — Which Is Actually Cheaper?
Line up real offers with their rates, tenures and fees. The tool ranks them by the only number that matters — the total that leaves your pocket — which is often not the offer with the lowest advertised rate.
A quarter-point difference in rate looks small until you multiply it across twenty years — and a "zero fee" offer can quietly cost more than one with a processing charge if its rate is higher. Comparing on EMI alone hides both. This ranks offers on total outgo: every rupee of EMI plus every fee, over the full tenure.
Compare your offers
The lowest EMI is not the cheapest loan. The lowest total outgo is — and it's the number lenders rarely lead with.
The Fees That Hide Beyond the Rate
Two offers at the same rate can still cost very differently once the charges are counted. Before you sign, get every one of these in writing and fold them into the total:
- Processing fee. Usually a percentage of the loan, often capped — the single biggest add-on, and frequently negotiable.
- Legal & valuation charges. For verifying the property's title and worth; sometimes bundled, sometimes billed separately.
- Documentation / MODT charges. Stamp duty on the mortgage deed and paperwork, which varies by state and can run into tens of thousands.
- Bundled insurance. A loan-protection or property policy sold alongside — often optional, and it inflates the effective cost if you don't need it.
- Conversion / switch fee. What the lender charges later to move you to a lower rate or a different benchmark.
- Late-payment & bounce charges. Not a cost today, but worth knowing the penalty structure before you commit.
MCLR vs Repo-Linked (RLLR)
Every floating loan is tied to a benchmark that decides how your rate moves. The two you'll meet are repo-linked and MCLR — and they behave differently when the RBI changes policy:
⚡ Repo-linked (RLLR / EBLR)
- Tied directly to the RBI repo rate, an external benchmark
- Resets quickly and transparently when policy changes — usually every quarter
- Mandatory for new floating retail loans since 2019
- You can see exactly why your rate moved
🐢 MCLR-linked
- Tied to the bank's own marginal cost of funds — an internal benchmark
- Resets more slowly, so rate cuts reach you later
- Common on older loans taken before 2019
- Less transparent about what drives the change
If you're on an older MCLR-linked loan and rates have fallen, switching to a repo-linked rate — with your own bank or via a balance transfer — often lowers your cost. Ask your lender for the conversion fee and compare it against the interest you'd save.
How to Negotiate a Better Rate
The advertised rate is a starting point, not a fixed price. Borrowers with leverage routinely shave it down — here's where the leverage comes from:
- Bring competing offers. A written sanction from another lender is the strongest card you can play — ask your preferred bank to match or beat it.
- Lead with your credit score. A 750+ score and clean history are your main bargaining chip; make sure the lender knows it upfront.
- Ask for a processing-fee waiver. Even when the rate won't budge, the fee often will, especially during festive or year-end pushes.
- Use an existing relationship. Salary accounts, deposits or a prior loan with the bank can earn a relationship discount.
- Add a strong co-applicant. A co-applicant with good income and score can improve both the rate and the amount; some lenders also offer a small concession on loans with a woman as primary owner.
- Threaten the transfer. If you're already a borrower, telling your lender you're considering a balance transfer frequently unlocks a retention rate — ask before you switch.
A Worked Example: When the Lower Rate Loses
The clearest way to see why total outgo matters is to watch the "cheaper" loan lose. Take a ₹40 lakh loan over 20 years and two offers:
| Offer A | Offer B | |
|---|---|---|
| Rate | 8.45% | 8.40% |
| Processing fee | ₹10,000 | ₹60,000 |
| Monthly EMI | ≈ ₹34,586 | ≈ ₹34,454 |
| Total outgo (EMIs + fee) | ≈ ₹83.11 lakh | ≈ ₹83.29 lakh |
Offer B has the lower rate and the lower EMI, so it looks like the obvious pick. But its larger ₹60,000 fee more than erases that 0.05% rate advantage: over the full tenure Offer B actually costs about ₹18,000 more than A. The lower-rate loan is the costlier one. When rates are this close, the fees decide — and the EMI, the number borrowers fixate on, points you at the wrong answer. The calculator above does this arithmetic across every offer, so you compare the figure that truly leaves your account.
Balance Transfer: How and When It Pays
A balance transfer (or refinance) moves your outstanding loan to a lender offering a lower rate. On a floating individual loan there's no foreclosure charge to leave your current lender under RBI's 2026 rules, so the only real cost is the new lender's processing fee. The process is straightforward:
- Get a quote and a foreclosure letter. Ask the new lender for their rate and fee, and your current lender for an outstanding-balance / foreclosure statement.
- Apply with the new lender. Submit income, identity and property documents — much like a fresh loan, with a fresh credit check.
- New lender pays off the old loan. On approval they settle your old balance directly and your old loan closes.
- Collect documents & confirm the lien moves. Your property papers transfer to the new lender; make sure the charge is updated and the old loan shows closed on your credit report.
Questions to Ask Every Lender
Two offers can look identical on a brochure and differ by lakhs once you ask the right questions. Put these to every lender before you commit:
- What is the all-in processing fee, and will you waive or reduce it?
- Is the rate repo-linked or MCLR-linked, and how often does it reset?
- What other charges apply — legal, valuation, MODT, documentation — and are any bundled?
- Is any insurance mandatory, or can I decline the loan-protection policy?
- What is the conversion fee to move to a lower rate later?
- Can I get the full cost sheet / Key Facts Statement in writing before I decide?
Get the answers in writing, enter the fees into the calculator, and let total outgo — not the sales pitch — pick the winner.
Where to next
Picked an offer? These take it forward — each opens fresh with its own inputs.
