Some Aspects on Commercial Vehicle Loan

Commercial vehicle loans are loans offered to the borrowers who are self-employed individuals, organizations, partnership firms, trusts, etc. so that they can purchase vehicles for business or commercial purposes. Such loans are given to people who are involved in the transportation business. A commercial vehicle loan becomes very useful when someone needs to purchase a bus, tanker, tipper, trucks, or small commercial vehicles. The process of securing this loan is pretty much hassle-free, swift, and also requires less paperwork.

Features of Commercial Vehicle Loans

• Faster and quick approval: The processing period of a commercial vehicle loan is pretty fast, with easy approval and documentation. Once the necessary documents have been submitted, it requires around a week to disburse the loan amount.

• Better interest rate: If the profile of the borrower matches the criteria set by the lenders, then the borrower does get a commercial vehicle loan at a shallow interest.

• Easily offered by different banks and financial institutions: Almost every prominent bank provides commercial vehicle loans at an affordable rate of interest without any security.

Types of Commercial Vehicle Loans

• New commercial vehicle loan: Such types of loans are offered to customers for purchasing new commercial vehicles for business purposes. Some banks and loan companies provide additional funding for the body construction of the motor vehicles.

• Old commercial vehicle loan: Here, borrowers usually get loans against old and worn out vehicles that are up to 15 years old.

• Commercial vehicle refinancing: Under such type of financing, banks or institutions either offer a loan on an existing motorized vehicle that is free of credit or takes over an existing commercial vehicle loan and provide additional cost for it based on eligibility.

Advantages of Commercial Vehicle Loans

If you are willing to start a transportation business or want to invest in the commercial vehicle, one of the best ways to make a purchase is the commercial vehicle loans. These loans come with easy processing and repayment option, thus making it easy for the applicant to purchase the desired commercial vehicle. 

There are certain another set of Advantages that you must know:

Flexible tenure of repayment: The period of repayment provided to the commercial vehicle loan is up to five years. It ensures a low amount of EMI to the borrowers. This norm allows the borrowers to pay off the EMI without any additional burden.

Multiple vehicle financing: No matter whether you are a fleet owner or an individual borrower, you can still get loans for a variety of vehicles like trucks, buses, tippers, trailers, and other types of light and small commercial vehicles to grow your business.

Simple documentation: One significant advantage of a commercial vehicle loan is that it is a hassle-free and easy documentation process.

No compulsion of credit score: Commercial vehicle loans, unlike other investments, do not demand any existing credit score.

Caters to multiple needs: There are loan schemes that are designed to provide to the diverse requirement of the borrower, including used and new vehicle financing.

Interest rates of Commercial Vehicle Loans

The rate of interest on commercial varies from one bank to another. The lenders generally fix the amount based on the segment of the vehicle or the customers. After proper evaluation of the documents along with the profile of any individual borrower, the lending entity then decides the final rate of interest charged for the profile.

Key points to consider before applying for commercial vehicle loan:

If you are looking forward to applying for this loan, there are certain parameters that you should consider:

1. Check the APR offered by different banks
2. Processing fees
3. Loan tenure and prepayment options
4. Are there any other charges or hidden cost
5. Your credit score matters the most as it will be the deciding factor for approval or rejection of loan

Commercial vehicle loans can be availed even if someone does not match with the entire eligibility criteria. However, if the financial profile and credit of your co-applicant are commendable, you may qualify to get a loan. You will need a guarantee for the availing of the loan.

Final Thoughts: The above piece of information will be beneficial for you if you are planning to apply for a commercial vehicle loan.