Bank/NBFI installment loan (reducing-balance EMI) vs NBFI Ijara/lease (15% VAT-inclusive rental) — compare the real total cost of ownership for the same vehicle or equipment financed both ways.
Compare the real total cost of ownership between a reducing-balance EMI loan and a VAT-inclusive lease rental for the same asset and tenor.
As a percent of asset price (payable at term-end to take ownership)
| Item | Loan Path | Lease Path |
|---|---|---|
| Monthly Payment | ৳35,591 | ৳46,849 |
| Down Payment | ৳400,000 | — |
| Interest / Base Rental (pre-VAT) | ৳535,460 | ৳2,444,280 |
| 15% VAT (on lease rental) | ৳0 (N/A) | ৳366,660 |
| Processing Fee | ৳16,000 | — |
| Residual/Buyout Value | — | ৳400,000 |
| Total Cost of Ownership | ৳2,551,460 | ৳3,210,940 |
Representative rate bands — not live quotations
| Institution | Product | Rate Band | Tenor |
|---|---|---|---|
| Dutch-Bangla Bank PLC | Auto Loan (Hypothecation) | 9.5% – 12.5% | 12–72 months |
| BRAC Bank PLC | Auto Loan (Hypothecation) | 10% – 13% | 12–60 months |
| Eastern Bank PLC (EBL) | Auto Loan (Hypothecation) | 9.75% – 13% | 12–72 months |
| City Bank PLC | Equipment / Capital Machinery Loan | 10.5% – 14% | 12–60 months |
| Institution | Product | Rate Band | Tenor |
|---|---|---|---|
| IDLC Finance PLC | Ijara / Lease Financing | 12% – 16% | 12–60 months |
| IPDC Finance PLC | Ijara / Lease Financing | 12% – 15.5% | 12–60 months |
| LankaBangla Finance PLC | Ijara / Lease Financing | 12.5% – 16% | 12–60 months |
| Bay Leasing & Investment Limited | Ijara / Lease Financing | 13% – 16.5% | 12–48 months |
| Union Capital Limited | Hire Purchase Financing | 13% – 17% | 12–48 months |
| Uttara Finance and Investments Limited | Ijara / Lease Financing | 12.5% – 16% | 12–60 months |
15% VAT is added separately on top of the NBFI lease rate — the rates above are pre-VAT.
Authoritative briefings on Bangladesh vehicle & equipment financing structures
Understand the fundamental differences in ownership, control, and liability between a bank/NBFI installment loan and an NBFI Ijara/lease when financing a vehicle or equipment purchase.
An explanation of how Bangladesh's VAT law treats lease rentals differently from loan interest, and the real cost impact this has.
How the residual value in a lease agreement is set, how it affects your monthly rental, and what your options are at term-end.
Why some businesses prefer lease financing despite the higher VAT-inclusive cost — off-balance-sheet treatment, input VAT reclaim, and simpler documentation.
The reality behind 'zero down payment' lease advertisements, and the correct way to judge the real total cost of ownership.
A step-by-step worked calculation of financing the same ৳20 lakh car once via a bank loan and once via an NBFI lease.
Guidance based on bank loan vs NBFI lease structural differences
The institutional rate bands below are a representative educational estimate only — they are not live quotations or an official offer from any bank/NBFI. Verify the institution's current rate sheet before making a final decision.
This hub is an educational comparison tool. It does not provide legal, tax, or investment advice. Verify the bank's/NBFI's current terms and consult a financial advisor before signing an actual loan/lease agreement.