Finance
Car Loan EMI vs Leasing in Pakistan — Which is Cheaper?
2 December 20246 min read
EMICar FinanceBanking
Table of contents
Bank EMI (conventional)
You take a loan, the bank charges KIBOR + spread (usually KIBOR + 3–5%), and you pay equal monthly installments.
EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)
Islamic leasing (Ijarah)
The bank buys the car and leases it to you. Ownership transfers at the end. Pricing is benchmarked to KIBOR but structured as rent.
Real comparison (PKR 3,000,000 car, 5 years)
| Option | Rate | Monthly | Total cost |
|---|---|---|---|
| Bank EMI | 22% | ~PKR 82,800 | ~PKR 4.97m |
| Islamic Ijarah | 22% | ~PKR 82,900 | ~PKR 4.97m |
In practice the costs are very close. Choose based on your principle preference, processing fees, and early-settlement terms.
Crunch the numbers with our Loan EMI Calculator.
