Hire purchase and asset finance calculator
Estimate hire purchase payments for equipment, machinery or company vehicles. Add a deposit or a final balloon to see how each changes the monthly payment.
Estimated monthly payment
€1,647.87
- Deposit
- €7,500
- Amount financed
- €67,500
- Total interest
- €11,598
Illustrative only. Actual rates, fees and terms depend on your circumstances and the lender. This is not an offer of finance.
How this calculator works
With hire purchase your company pays a deposit, then fixed monthly payments, and owns the asset once the final payment (and any balloon) is made. The asset itself is the main security.
A balloon lowers the monthly payment by leaving a lump sum to pay at the end. You pay interest on it throughout, so the total cost is higher.
On hire purchase your company is usually treated as the owner for tax, so it can normally claim capital allowances on plant and machinery, generally 12.5% a year over 8 years, or 100% in the first year for qualifying energy-efficient equipment under the accelerated capital allowance scheme. Ask your accountant how this applies to you.
For illustration only: on €75,000 of equipment with a 10% deposit over 48 months at an example 8% a year, the payment is about €1,648 a month with total interest of around €11,600. Adding a 20% balloon (€15,000) brings the payment down to about €1,382 a month, but total interest rises to around €13,820, because part of the balance stays outstanding for the whole term.
Lenders look closely at the asset as well as the company: its type, age, expected working life and how easily it could be resold. When comparing quotes, check documentation and option-to-purchase fees, the lender’s conditions and what happens if you want to settle early. The calculator assumes fixed monthly payments and no fees.
Want to understand the product first? Read our guide to hire purchase finance.
Hire purchase and asset finance calculator: common questions
How are hire purchase payments calculated?
The calculator takes the cost of the asset, less any deposit, and spreads it over the term at the rate you enter, with equal monthly payments. If you add a balloon, that amount is left to pay at the end, so the monthly payment drops but interest is charged on the balloon throughout. Fees are not included.
Is VAT included in hire purchase?
On hire purchase the VAT on the full price is usually charged at the start, and a VAT-registered company can normally reclaim it on its next return if the asset is used for taxable business. Enter the cost excluding VAT here, and plan cash flow for the VAT until it is reclaimed.
Hire purchase or leasing: which is better?
Hire purchase suits assets you want to own and keep, and your company can usually claim capital allowances. Leasing can suit assets you will replace regularly, with VAT charged on each rental instead of upfront. Your accountant can say which works better for tax. Try our equipment lease calculator to compare.
Can I finance used equipment?
Often, yes, depending on its age, value and resale market. Lenders may ask for a valuation, a larger deposit or a shorter term on older assets, and some set a maximum age at the end of the agreement. Buying from a recognised dealer can make used equipment easier to finance.
Should I put down a deposit?
Not always. Some lenders fund the full cost, while others ask for a deposit, often around 10%, depending on the asset and the company’s accounts. A deposit lowers the payments and total interest, but uses cash you might need elsewhere.
What is a balloon payment?
A balloon is a larger final payment left until the end of the agreement. It lowers the monthly payment because less capital is repaid each month. Interest is still charged on it throughout, and it must be paid before ownership passes to your company, so plan for it from the start.
What happens if the company can’t keep up the payments?
The lender owns the asset until the final payment is made, so it can usually repossess it if payments are missed, and may still pursue any shortfall. Directors may also be liable if they gave a personal guarantee. Speak to the lender early if trading gets difficult.
Check in 60 seconds
Get real figures for your company
Checking involves no credit search and is not recorded on the Central Credit Register. No obligation.
- No credit search, not recorded on the Central Credit Register
- One request, several lenders: we’re a broker, not a lender
- For limited companies registered in Ireland
- No fees for your company: we’re paid commission by the lender
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