You can avail a loan to purchase vehicles such as trucks, buses used for commercial purposes. Normally you will have to pay 20% of the cost of the vehicle up front; the remaining is financed by the bank.
What is Commercial Vehicle Loan?
Commercial vehicles like buses and trucks are very important to a transport business. They contribute to productivity and generate income. Banks grant Commercial Vehicle Loans to businessmen to buy commercial vehicles. This is a secured loan. Commercial vehicle loans are availed by individuals, partnership firms, HUF (Hindu Undivided Families) for financing the needs of owning and running commercial vehicles. Commercial loans are used in the transportation business. These loans fund trucks, tippers, buses, light commercial vehicles, three wheelers and so on. Normally you pay 20% of the cost of the vehicle up front: and the remaining amount is financed by the bank.
Features of a Commercial Vehicle Loan
- If a borrowers profile matches the bank’s criteria, they can get a Commercial Vehicle Loan at lower rates.
- Processing time of a Commercial Vehicle Loan is quite fast.
- Commercial Vehicle Loan has easy documentation and approval.
- It takes around 7 days to disburse the loan amounts.
- Banks charge around 2% penalty if borrowers prepay their loans.
Why avail Commercial Vehicle Loan?
Borrowers use this money for their transportation business. Used to finance trucks, buses, tippers and commercial vehicles.
You get funding even up to 90% of the chassis and 100% in some cases. Down payment is very low.
Customized finance solutions to meet individual needs of the borrowers. Finance available for used vehicles.
Hassle free documentation. Loan processing is quick.
Commercial Vehicle Loan interest rates
- Interest rates vary from bank to bank.
- Economic conditions of a country impact interest rates.
- Interest rates range from 10-15% a year depending on the borrower and vehicle.
Who can avail a Commercial Vehicle Loan?
- First time buyers of trucks and buses.
- Small, medium and large-sized fleet owners.
- Partnership firms.
- Public Limited Companies.
- Private Limited Companies.
- Schools and Colleges.
Commercial Vehicle Loan Eligibility
New commercial Vehicles
- The borrower should be between 24-65 years.
- Salaried borrowers should be working for a minimum of 2 years in the same job. Self-employed individuals must have a minimum of 2 years of business experience.
- Associations, trusts, private companies, partnership firms and societies must be in existence for at least 2 years. They should provide 2 years of audited financials.
- Existing vehicle owners must have 1-3 years of vehicle ownership proof.
- A guarantor is needed for first-time buyers, fleet owners and individuals.
- Stay at the same residence for at least 2 years.
Old Commercial Vehicles
- The borrower should have a minimum of 1 year of ownership of at least 2 vehicles.
- 1 year repayment track record on commercial vehicles.
Advantages of Commercial Vehicle Loans
- The repayment tenure of a Commercial Vehicle Loan is between 4 to 5 years. So, EMIs are low.
- You can get a Commercial Vehicle Loan for a variety of vehicles such as tippers, trucks, buses, trailers, tankers and so on to grow your business.
- The process of applying for a Commercial Vehicle Loan is real easy and convenient.
- Hassle-free documentation process.
- Credit score has no impact on the eligibility criteria to avail a Commercial Vehicle Loan.