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Loan vs Lease Calculator (INR)

How to Use the Loan vs Lease Calculator?

Use this calculator to compare the costs of financing a vehicle through a loan versus leasing it. Enter the vehicle price, interest rates, loan/lease terms, and other details to estimate your monthly payments and total costs.

Key Comparison Insights:

  • Loan vs Lease Payments – Compare monthly payments for both options.
  • Total Cost Over Time – See the total amount paid for each financing method.

Explanation of Key Fields

  • Vehicle Price (INR): The total cost of the vehicle before financing.
  • Loan Interest Rate (%): The annual percentage rate (APR) charged by the lender for the loan.
  • Loan Term (Months): The total duration of the loan in months (e.g., 60 months = 5 years).
  • Down Payment (INR): The upfront payment that reduces the loan amount.
  • Lease Interest Rate (%): The annual percentage rate (APR) applied to the lease financing.
  • Lease Term (Months): The total lease duration in months (e.g., 36 months = 3 years).
  • Residual Value (% of MSRP): The estimated value of the vehicle at the end of the lease term, set by the leasing company.
Vehicle Price (INR)Total cost of the vehicle.

Selected Price: 2,500,000 INR

Loan Interest Rate (%)Annual interest rate for the loan.

Selected Rate: 7.5% PA

Loan Term (Months)Total duration of the loan in months.

Selected Term: 60 Months

Down Payment (INR)Initial payment to reduce loan amount.

Selected Value: 500,000 INR

Lease Interest Rate (%)Annual interest rate applied to lease.

Selected Rate: 5% PA

Lease Term (Months)Total duration of the lease in months.

Selected Term: 36 Months

Residual Value (% of MSRP)Estimated value of the vehicle at lease-end.

Selected Value: 50%

ComparisonLoanLease
Monthly Payment₹40075.90₹50347.22
Total Amount Paid₹2904553.83₹1812500.00

Disclaimer: This calculator provides an estimate of loan and lease payments based on the given inputs. Actual payments may vary due to lender policies, market conditions, and additional charges such as taxes, insurance, and fees. Please consult with a financial advisor or your bank for precise details before making a decision.

How Does a Loan Work?

When you take a loan, you are purchasing the vehicle by borrowing money from a lender. You will make monthly payments that cover boththe principal amount (vehicle cost minus down payment)and interest. Once all payments are completed, youown the car outright.

Key Loan Factors:

  • Higher monthly payments compared to leasing.
  • Full ownership of the car after loan repayment.
  • Down payment is typically required.
  • You can keep or sell the car anytime.

How Does Leasing Work?

Leasing is likerenting a vehicle for a fixed period. Instead of paying for the full price of the car, you only pay for the depreciation (the value lost over time) and interest. At the end of the lease term, you return the car to the dealer unless you choose to buy it at its residual value.

Key Lease Factors:

  • Lower monthly payments compared to a loan.
  • You don’t own the car unless you buy it at lease-end.
  • No down payment in most cases.
  • Usually comes with mileage limits (e.g., 10,000-15,000 km per year).

Loan vs Lease: Which One to Choose?

Choosing between a loan and a lease depends on your needs and financial situation:

  • Choose a Loan if you want toown the car, drive as much as you like, and keep it long-term.
  • Choose a Lease if you preferlower monthly payments, want to drive a new car every few years, and don’t mind mileage limits.
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