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We are looking to purchase a sewing machine ($3000) in the very near future. The company we are buying from offers financing through a lease-to-own (LTO) company. The finance company is telling me that the LTO option is better for tax purposes. However the interest amount is a set amount regardless of how quickly we pay off the loan. Would there be a benifit to the LTO option or should we seek traditional financing through our bank with the option to pay the note off quicker? Some numbers for example. LTO- 4 years. $89/ month. Total payback amount $4272 Interest total $1322 (these amounts must be paid regardless of how quickly the note is paid off) Traditional loan- 4 years @ 11% interest rate. $76.24/ month. $3659.73 total loan amount. $709.73 interest @ full term. No penalty for early payoff.
