Commercial Vehicle Loans are taken for purchasing all types of commercial vehicles, depending on your business requirements. A commercial vehicle loan can be opted by the self-employed individual, partnerships, organizations, etc for buying the vehicle for their business. Commercial vehicles can be anything like trucks, buses, tankers, light and small commercial vehicles.
Why will you require a commercial vehicle loan?
Requiring finance for a commercial vehicle might have any reason depending upon your business requirements like
- Increasing productivity of your business
- When you want to transport your goods within your branches or for your customers
- If you have a delivery facility for your business
- When you are a travel agent or have related businesses
- Farm equipment or constructing vehicles
Types of commercial vehicle loan:
Depending upon the type of vehicles you opt for, commercial vehicle loan comes under two types like:
New Commercial Vehicle Loan:
When you need financing for purchasing a new vehicle for your business you can opt for a new commercial vehicle loan. Most of the banks and NBFC’s offer full funding for the base frame value for the vehicle you are purchasing. Some even offer additional funding for the body construction depending upon your credit score and other criteria’s.
Used Commercial Vehicle Loan:
The Used commercial vehicle loan is used for buying old and used vehicles for utilizing it back for your business requirements. You can expect for this loan on vehicles which are up to 15 years old. In most banks and NBFC’s, the funding which you will get for these vehicles will be up to 90% if the vehicle’s devaluation rate.
Who can avail a commercial vehicle loan?
Both the banks and NBFC’s offer commercial vehicle finance for a lot of customers depending upon their business requirements. Here is a list of customers who are eligible for opting for this loan:
- Self-Employed Individuals
- Proprietors or partnership businesses
- Educational institutions
- Travels & transport agencies
- Public & private limited
When you are a self-employed individual you can apply for this loan but you should jointly apply with some other person. The same happens when you are a partnership firm.
Advantages of a commercial vehicle loan:
Commercial vehicle loan is the most chosen option for borrowers who are buying their first vehicle for business or are planning to add one more vehicle under their business. The most important advantages of a commercial vehicle loan are:
Competitive Interest Rates:
All the financial institutions offer competitive interest rates for a commercial vehicle loan. You should be sure if your requirements and eligibility meet theirs before confirming.
Flexible Repayment Tenure:
Typically, the repayment tenure for the commercial vehicle loan will be up to 10 years. With that, we can be sure of low EMI amount which will not affect the borrower’s financial burdens.
You can get financing for any type of vehicles like trucks, buses, tankers, tippers, and small and large commercial vehicles which will help enhance your business.
Quick & Easy Processing:
When it comes to commercial vehicle loan it is easy, convenient and quick to apply and process. Mostly within days of document submission, your new or used commercial vehicle loan will be approved.
Commercial vehicle loans are said to be easy when it comes to its documentation process. Most of the banks and NBFC’s have made the application and documentation online. Even if you go directly you will have minimal documentation processes.
No Credit-Score Necessity:
Unlike other loans, these don’t require any credit score ratings. Even people who have very low or zero credit score can use from the commercial vehicle loan without any problem.
Each individual will need a different type of vehicle and their requirements for loans might vary. So the bank or NBFC will customize a loan and its tenure based on the financial ability of each individual.
Commercial Vehicle Loan – Eligibility:
For New Commercial Vehicles:
- If you are a self-employed or salaried individual you should have at least 2 years of experience in your work or business.
- When you are a partnership firm, trust or association you must exist for 2 years.
- Existing travels or fleets owners must have up to 3 years of vehicle possession and evidence about your current vehicle.
- If anyone can guarantee you then even as a first-timer you will eligible for the loan.
- You should be able to provide audit documents of your business for 2 years.
For Used Commercial Vehicles:
- Borrowers should own at least two vehicles for a minimum of a year.
- If you are looking for a used commercial vehicle loan you should have at least 3 – 5 years of experience depending upon your requirements.
- You should have a track record at least for a year for repayment your existing loans.
Documentation for Commercial Vehicle Loan:
When you are opting for a commercial vehicle loan you should provide the following documents for processing your loan:
- Commercial vehicle loan application form with your photograph attached.
- 2 additional passport size photographs
- A cheque for submitting your processing fee (if applicable)
- KYC documents
- Age Proof – Aadhar card/ Voter’s ID/ PAN card/ Driving License (Any One of these)
- ID Proof – Aadhar card/ Voter’s ID/ PAN card/ Driving License (Any One of these)
- Resident Proof – Rental agreement/ Voter’s ID/ Passport/ EB bill/ Telephone bill (Any one of these)
- Signature Proof – PAN card/ Driving License/ Registered Sales Deed (Any one of these)
- Income proof
- Last 3 months payslip
- Account statement for your bank for the past 6 months
- Form 16
- Updated ITR documents for at least 2 years
- Photocopy of your official ID
- Experience Proof
Other general documents like
- Existing vehicle ownership deed
- Vehicle details and valuation reports
- RC book
- Insurance copy
- Details related to your fleets (whether it is small, medium or large)
- Trade references if any
- When you apply for farm vehicles, you should provide the property ownership deed
- Partnership deeds if any
- If you already have a loan you should provide a loan repayment track record
When you are looking for a commercial vehicle loan with any information you can easily choose the best finance provider who will best suit your business requirements and opt for a loan.