How to Get a Lease Buyout Loan
What it is
| At a Glance | |
|---|---|
| Loan Type: | Car |
| Lender: | Bank |
| Secured: | Yes |
A lease buyout loan is for borrowers who are unable to buyout the remaining amount on a car or equipment lease at the end of the term. With a lease buyout loan, a commercial lender pays out the remaining balance on the lease to the leasing company and in turn, the borrower pays a monthly payment to the financing company. Many people end up needing a lease buyout loan, because often leasing a car or equipment is much cheaper than buying a car or equipment. The process begins when a leasing company provides equipment at a monthly fee to a borrower. This provides lower monthly payments and provides equipment or a vehicle that a borrower would not have been able to provide.
Leases are generally provided for fixed three- to five-year terms and often come with a fixed purchase amount at the end of the term. Buying out the lease at the end of the term through a lease buyout loan can help a borrower to use the money they've spent on the lease productively.
Who it's for
Many small businesses find themselves in need of equipment and many owners will find that they need a company vehicle. A lease is a convenient way to obtain these assets that you need now at a low monthly rate, while providing the option to purchase it in full at the end of the term. When the term comes to an end and you are still short on cash, a lease buyout loan is a particularly attractive option.
What you need to do to apply
In order to be approved for a lease buyout loan, a borrower must demonstrate financial responsibility, including a good credit report. The leased equipment or car can generally act as collateral.
Apply for a Lease Buyout Loan
Apply for your vehicle loan with Capital One Auto Finance