Lease Calculator
Calculate lease payments and effective interest rates for any asset
Lease Calculator
The Lease Calculator can be used to calculate the monthly payment or the effective interest rate on a lease. If the interest rate is known, use the "Fixed Rate" tab to calculate the monthly payment. If the monthly payment is known, use the "Fixed Pay" tab to calculate the effective interest rate.
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đ Understanding Leases
What is a Lease?
A lease is a contract between a lessor (owner) and lessee (user) for the use of an asset, with regular rental payments for a specific term.
Residual Value
The estimated value of the asset at the end of the lease term. This affects your monthly payment calculations.
Rent vs. Lease
"Lease" refers to the contract itself, while "rent" refers to the periodic payment. Neither builds equity in the asset.
Leasing vs. Buying
Leasing can provide access to newer assets with lower upfront costs and maintenance responsibilities, but you don't build equity. Consider your specific needs, usage patterns, and financial situation when deciding.
Key Considerations
- Depreciation: How much the asset loses value over time
- Usage: Mileage limits, wear and tear restrictions
- Flexibility: Early termination options and penalties
- Total Cost: Compare total lease payments vs. purchase price
- Tax Benefits: Potential business tax deductions for leases