When you think about what to choose, loan or leasing, you should first familiarize yourself with both concepts.
What is a loan?
The loan is a bilateral agreement that comes into effect when it is signed. Through the loan agreement, the bank or SKOK undertakes to transfer the amount of cash specified in the agreement to the borrower. According to the statutory concept, the loan amount should be allocated to the purpose resulting from the loan agreement. The exception is when we take, for example, a cash loan for any purpose. Then the funds from the loan, as the name suggests, can be used for any purpose. Credit can only be granted to us by the bank or credit unions. These are the only entities that can borrow money without being the owner. The other party to the contract, i.e. the borrower, by entering into the loan agreements, undertakes to pay back the loan installments with interest due and to bear any additional costs of the loan .
What is leasing?
The leasing agreement is a minimum bilateral agreement. In this case, however, a third entity may or may not appear. It is concluded in writing. Other methods of conclusion than written, have no legal effect. The leasing agreement assumes that the lessor gives the lessee the right to use the subject of the agreement. Leasing is the transfer of the right to use things which the lessor still owns. No ownership rights are transferred through a leasing contract. This option is only available to the user after the end of the leasing contract. Thanks to leasing, he gains the right to finally buy things. In exchange for using things, the lessee undertakes to pay the lease installments.
What to choose – credit or leasing
Colloquially speaking, by entering into a loan agreement we get money from the bank to buy it in line with the purpose of the agreement. By buying a given item we also become its owner. The leasing agreement gives us the right to use things owned by the lessor. It is only after the end of the lease agreement period that we gain the right to finally purchase the leased asset. The end of the contract does not mean that we become the owner of the thing.
What also distinguishes the above transactions is repayment flexibility. A loan is, in principle, equal installments throughout the loan period, the amount of which depends on the loan principal and the loan period. Lease payments make it possible to adjust the amount of each installment to the financial possibilities of the lessee. In addition to the value of the item and the leasing period, the amount of the lease payment is also affected by the amount of the initial payment and the final payment for the final purchase of the item.