Considerations for Choosing A Commercial Vehicle Loan

One of the lesser talked about loans is commercial vehicle loans. You can avail such type of loans when you need to purchase vehicles for business purposes. The vehicle can be of any kind, from a two-wheeler to heavy-duty trailer vehicles. Availing commercial vehicle loan is not tough but some of the things to be check before applying for the loan. Let’s discuss various considerations before choosing such loans:

• The eligibility criteria

Interestingly, the financial institutions will not assess the credit history of the borrowers before approving the loans. Also, any individual, proprietorship, business, or co-applicant can apply for commercial vehicle loans. For example, if you are venturing into the transport business, you can apply for a commercial car loan without having to worry about your CIBIL score.

• Tenure

The loan tenure of commercial vehicle loans can range from six months to four years.

• The loan amount and associated charges:

Considering that you are in the transport business and availing a commercial car loan, you are eligible for an amount ranging from 1 lakh to 5 crores. The associated charges can be stamping duty charges, processing charges, etc. 

• Documents needed:

Borrowers need to submit KYC documents, bank statements, balance sheets, IT returns, details of previous vehicles purchased through loans, reference details, and so on for hassle-free processing of commercial vehicle loans.

Conclusion:

Loan repayment is made through monthly instalments and foreclosure charges might be applicable in some situations. It is always better to assess various banks/NBFCs to determine the best financial institution as per your requirements. 

Read Reference: How to Get a Commercial Vehicle Loan in 5 Steps?