Monthly payment on equipment finance, allowing for a deposit and a balloon or final payment.
This calculator is a guide only. It assumes a constant interest rate and does not include arrangement fees, valuation costs, legal fees or early repayment charges, all of which affect the real cost of borrowing. It is not a quotation and does not constitute an offer of finance.
Using this against a supplier quote
This is the calculator's most useful application. Equipment suppliers quote finance as a monthly figure, which tells you nothing about the total cost.
Put the equipment price, deposit, term and balloon into the fields above and compare the monthly payment against what the supplier quoted. If theirs is higher at the same rate, you now know by how much. If you do not know their rate, work backwards: adjust the rate field until the monthly figure matches theirs, and you have found it.
That last trick is worth knowing. Supplier finance is frequently quoted without a stated rate.
The balloon payment
A balloon is a large final payment that reduces the monthly cost. It is common on vehicles and appears on some equipment agreements.
It makes the monthly figure look attractive and leaves you with a substantial payment at the end, which you then have to fund, refinance or settle by returning the asset. Set the balloon to zero and compare: the difference in total cost of credit is what the lower monthly payment is actually costing you.
VAT
Enter the cost excluding VAT. On hire purchase the VAT is normally payable up front and reclaimable, so it is not usually financed. On a lease the treatment differs and VAT is charged on the rentals.
If you are unsure which applies to a quote in front of you, send it over and we will tell you.
Related: asset finance, dental equipment and veterinary equipment.
All figures are indicative and subject to lender assessment, your circumstances, valuation and prevailing market conditions. Commercial mortgages and unregulated bridging loans are not regulated by the Financial Conduct Authority. Property offered as security may be at risk if you do not keep up repayments.