Purpose of a Commercial Vehicle Loan
As stated above, commercial vehicle loans are availed to fund the purchase of a vehicle that will generally be used for commercial or business purposes. These loans are offered by leading lenders in the country. The entire process of commercial vehicle loan application is swift, hassle-free, and requires less paperwork.See Your Options
Features of Commercial Vehicle Loans
• You can get a commercial vehicle loan at a low interest if your profile matches with the criteria put forward by the lenders. • The processing time of a commercial vehicle loan is fast with easy documentation and approval. • Some of the banks assign a personal relationship manager from starting till procurement of the vehicle. He/she will do all documentation and address every issue related to the loan. • Once all required documents are submitted, it takes around 3-4 days for the disbursal of the loan amount.
Types of Commercial Vehicle Loans
Commercial loans can be availed for a variety of commercial vehicles which are used at different places to serve various purposes. Based on the type of vehicles these loans are sought for, commercial vehicle finance is differentiated in three broad categories, namely
New commercial vehicle loan
This type of commercial vehicle loan is provided to the customers for the purchase of new commercial vehicles for business purpose. Banks offer up to 100% funding on the chassis or base frame value of the vehicle. Some of the banks provide additional funding for the body construction of the vehicles in selective cases based on the borrower’s profile.
Old commercial vehicle loan
Old or used commercial vehicle loan are those loans which are offered to purchase all makes of pre-owned or used commercial vehicles. Under this loan, borrowers can expect to get finance against old vehicles which are up to 10 years old. Most of the banks provide up to 90% funding on the used vehicle’s value or depreciation grid value.
1. Commercial vehicle refinancing
Under commercial vehicle refinancing, banks either offer loan on an existing vehicle which is free of loan or take over an existing commercial vehicle loan and provide additional finance for it based on eligibility. While some borrowers can reduce the monthly EMIs of their existing loan and free up some cash by refinancing an existing loan at lower interest rates, some others can get direct finance on their free vehicles to meet the working capital needs.
Who Can Avail Commercial Car Loans?
Banks and other lenders offer commercial car loan to a broad array of customers to meet their business needs. In other words, this type of vehicle loan can be availed by various segments of customers having diverse profiles. Here is the list of the consumers considered to be eligible for this loan:
- First-time users and buyers
- Small, medium and large-sized fleet owners
- Proprietorship firms and Partnership firms
- Public Limited & Private Limited Companies
- Trusts and societies
- Schools and colleges
- Captive customers and transporters
Salaried and self-employed individuals can co-apply for a commercial vehicle loan with blood relatives or family members. On the other hand, the partners in partnership firms and the directors in private limited companies can jointly apply for this loan. Note: Sometimes, banks or financial organisations offer special schemes for first-time buyers and fleet operators/owners.
Benefits of a Commercial Vehicle Loan
Commercial vehicle loan stands out to be the most preferred option for borrowers who are either intending to buy their first commercial vehicle or planning to add a new vehicle to their existing fleet of commercial vehicles due to the plethora of benefits that it offers. Some of the amazing benefits offered by these type of loans are as follows:
- Flexible repayment tenure- Usually, the repayment tenure offered in commercial car loan is up to 5 years. This ensures low EMI amount to the borrowers enabling them to pay off the EMIs without any undue financial burden.
- Multiple vehicle financing- Whether you are an individual borrower or a fleet owner, you can get finance for a variety of vehicles such as tippers, trucks, buses, trailers, tankers, and other small and light commercial vehicles to grow your business.
- Easy processing- The process of applying for a commercial vehicle loan is easy, fast and convenient. After the submission of all the required documents, banks usually take 4-5 days to process a new or used vehicle loan application.
- Simple documentation- Commercial vehicle loans come with a hassle-free and quick documentation process. The users can easily upload all the mandated documents online without visiting the bank directly.
- No credit-score compulsion- Unlikely other loans, commercial vehicle loans don’t require any existing credit score. Borrowers having low or even zero credit score can avail a commercial vehicle loan with ease.
- Caters to multiple needs: The loan schemes are designed to cater to the borrowers’ diverse requirements including new and used vehicle financing, top up on existing loan and refinancing of loans/vehicles for working capital.
- Customised solutions: In order to meet the specific requirements of the customers, every commercial vehicle loan scheme is customised according to the vehicle type, loan duration and financial ability of each individual borrower.