Hire Purchase Calculator

This calculator works out the true cost of a hire purchase agreement so you can see what you will pay each month and over the life of the contract, not just the advertised price and rate. Hire purchase is a common way to fund vehicles, appliances and equipment in New Zealand, but many agreements charge interest as a flat rate rather than on a reducing balance, which can make the real cost higher than it first appears. Enter the item price, the annual interest rate, the repayment term in months, and any hire purchase or documentation fees. The calculator returns your monthly principal repayment, the interest charged each month, and your combined total per month, plus the total cost of the hire purchase over the full contract and the total amount you will pay in interest alone. Because interest is worked out on the original item price for every month of the term rather than a shrinking balance, the total interest figure shows how costly flat-rate hire purchase can be next to a reducing-balance loan, and lenders often stretch terms to 36-60 months because that is where they earn the most interest. Use the results to compare hire purchase quotes against a personal loan or vehicle finance offer before signing, and check your contract's actual fee and rate structure, as figures here are indicative estimates only and not financial advice.

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