Debt consolidation
No fee or a lower interest rate: which costs less?
Compare the full cost for the same cash need. The lower interest rate alone does not settle the choice.
Page summary
A lower rate can cost more if a fee makes you borrow extra. Compare the same cash over the same time. Add all payments and fees, then check the lender’s APR. Make sure each monthly bill fits.
This article keeps its September 5, 2026 snapshot record. The earlier 17-program comparison was withdrawn. Read the scope correction. The current loan-fee study has a narrower scope and cannot predict your offer.
Original snapshot and reuse limits
CC BY 4.0 covers Rung-owned work only. Third-party material is excluded. The original snapshot recorded publisher review and third-party source clearance as pending; this copy review adds no approval.
Keep the cash need the same
The example below sends $10,000 to creditors with either loan. Both last 36 months. The fee-bearing loan must start at a larger amount because part is taken out.
These are example fixed interest rates, not promised offers or disclosed APRs. The interest rate sets the payment in this model. A real offer’s APR also reflects certain fees. Check both the full cost and the payment before choosing.
Compare the same cash and loan length
Scroll across to see all columns.
| Offer | Fixed interest rate | Deducted fee | Loan amount before fees | Total paid | Borrowing cost |
|---|---|---|---|---|---|
| No-fee offer | 12.00% | $0 | $10,000 | $11,957.15 | $1,957.15 |
| Lower-rate offer | 10.00% | 5.00% | $10,526.32 | $12,227.57 | $2,227.57 |
A lower interest rate can come with a larger loan
These are fixed interest rates, not APRs. APR includes interest and certain fees. The model uses monthly payments for 36 months and rounds results to cents. This is an example, not an offer. See the CFPB explanation of interest rate and APR. The label was corrected September 8, 2026; the math has not changed.
Rate, fee and loan length change the cost
The lower rate costs $270.41 more in this example
The no-fee loan costs $1,957.15 to borrow. The lower-rate loan costs $2,227.57 because the fee requires a larger balance. Its monthly payment is $339.65, compared with $332.14 for the no-fee loan. The difference uses unrounded totals before rounding to cents.
A smaller fee or a bigger rate reduction could reverse the result. Early payoff can change it too: a fee already paid may not be refunded. Compare both offers again for your actual cash need, term, and expected payoff date.
Check the next part of your offer
Compare the same cash need in both offers
The tool opens with a different example. To repeat this one, set cash needed to $10,000 and turn off offer C. Set both loans to 36 months.
- Offer A: $10,000 loan, 12% fixed interest rate, 0% fee, and “No fee.”
- Offer B: $10,526.32 loan, 10% fixed interest rate, 5% fee, and “Taken from the loan money.”
For your own comparison, replace these numbers with your written offers. Check the offered APR too; the tool does not calculate APR.