Saturday, December 15, 2018

Hire Purchase (and Lease) Calculator


This useful hire purchase (and lease) calculator generate effective interest rate (and not just the flat rate quoted by the banks that is useless for comparison of loan offers)

  • You can use effective interest rate to compare various hire purchase/ lease offer. It can even compare loan with same quoted flat rate but with variation of making final instalments upfront.
  • You can use effective interest to compare with other interest rates like housing loan interest rates or fixed deposit rates, etc.

You can download this Hire Purchase Calculator here.


Should you get a hire purchase loan or use the extra money you kept in your flexi-housing loan to pay for your new car? It can be confusing.

It is difficult to know the true interest cost of your hire purchase (or lease) because the interest rate is quoted in flat rate. This flat rate is not comparable with the interest rate we usually use for fixed deposit or housing loan.

For instance, a flat rate of 3.5% for a 5-year hire purchase is equivalent to effective interest rate of 7.56%. We cannot use the flat rate 3.5% to do any comparison. However, can use this 7.56% interest rate to compare with housing loan rate of 4.25% or fixed deposit rate of 3.25%.

A 3.5% flat rate of car hire purchase loan is MORE expensive than your 4.25% housing loan rate.

This useful hire purchase calculator helps you to calculate the effective interest rate based on flat interest rate quoted in hire purchase or lease.

Enter value to the grey color cells.
This calculator calculate total interest cost, installment amount, total repayment amount, and effective interest rate. It allows you to compare various HP or lease offers and even with housing loan.

This calculator generate repayment timetable with specific dates.

Repayment schedule.

With repayment schedule you can know the amount of early repayment and the last instalment.

This calculator can be used to calculate leasing or hire purchase loan of your business equipment too.

Some leasing companies offer lease agreements that require you to pay your final instalment(s) upfront. Such arrangement increases your actual effective interest rate despite that the quoted flat rate remain the same. This calculator includes such factor to generate accurate effective interest rate.

You may download this Hire Purchase Calculator here.