Managing a business can be challenging and adding the extra expense to buy a new vehicle can disrupt your financial stability. It is advised not to allocate all your funds towards a vehicle. Especially in the initial stages of a business, even a tiny part of capital can be worth a substantial amount.
Consider a loan for commercial vehicles if you need help getting the vehicles to run your business. This type of loan can help you build credit. It lets you establish a positive payment history and buy the necessary vehicles.
Loan for commercial vehicles allows self-made individuals, small business owners, and organisations to purchase vehicles without paying the total amount upfront. This option can benefit those who need more funds to buy a commercial vehicle outright. We will first go through the topic of commercial vehicle loan eligibility. So, if you are a new business owner, read on to discover how you can avail loan for commercial vehicles.
Categories Of Eligible Customers
A broad array of customers falls into the category that can benefit from loan for commercial vehicles. We have jotted down the list of all the eligible customers for the loan.
Entrepreneurs or Business Owners: Commercial vehicle loan eligibility changes with the customer. Various customers with different profiles can apply for a loan for commercial vehicles. These borrowers can be entrepreneurs who own small, medium, and large-sized fleets. The borrowers working in public limited or private limited companies can get a loan for commercial vehicles.
Salaried Employees: People working on a monthly salary basis and self-employed independent individuals can co-apply for a loan for commercial vehicles. They can co-apply with their blood relatives or family members. They can also apply with their partners and the directors of their companies.
Types of Loan for Commercial Vehicles
Now that we have discussed the commercial vehicle loan eligibility. Let us discuss their several types before we get into the rate of interest on commercial vehicle loan. Commercial vehicle loans fall into three broad categories, serving different purposes, which are:
New commercial vehicle loan: When planning to buy a new vehicle for business purposes. The borrower can profit from this loan for commercial vehicles. Getting almost 100 per cent funding is possible with this loan for commercial vehicles.
Old commercial vehicle loan: If you want to buy an old business vehicle, apply for this loan. This old or used commercial vehicle loan is ideal for you. With a payback period of up to seven years, this vehicle loan has appealing rate of interest on commercial vehicle loan.
Commercial vehicle refinancing: In this category, the banks offer a loan on a loan-free existing vehicle. They also provide extra finance based on eligibility. The bank also allows taking over an existing commercial vehicle loan.
Loan for Commercial Vehicles Benefits
Longer Term for Repaying
The vehicle serves as security and reduces the risk for the lender. The banks grant you more time to repay your debt, which is significant. The repayment tenure may vary from 12 months to 84 months.
Low Rate of Interest on Commercial Vehicle Loan
Lower rate of interest on commercial vehicle loan are charged since they can recover the debt value even if you fail to pay your loan on commercial vehicles.
Vehicle Acts as Collateral
Avoid giving additional collateral for a better rate, as the vehicle acts as collateral. The scheme that comes with the loan for commercial vehicles works in favour of helping the borrowers.
Commercial Vehicle Loan Eligibility
The eligibility criteria for the loan of commercial vehicles are categorised into two categories. They are as follows:
- In the case of new commercial vehicles
- The self-employed borrower must have at least two years of business experience. The hired borrower must have worked full-time for at least two years.
- Partnerships, limited liability corporations, trusts, businesses, and organisations must operate for a minimum of two years.
- The fleet operators and other current vehicle owners need to have the document of ownership for one or two commercial vehicles.
- Examples of limited liability entities include corporations, partnerships, trusts, and firms.
- Companies must present two years’ worth of audited annual accounts.
- An internal or external guarantor may be necessary for individuals, first-time buyers, fleet operators, and owners.
- You must have spent at least two years living at your current address to avail a loan for commercial vehicles.
- In the case of old or used commercial vehicles
- Besides the prerequisites, applicants for a used vehicle must fulfil the following requirements:
- The client expects 3 to 5 years of relevant business experience, depending on the specific profile, to take advantage of the loan for commercial vehicles.
- Ownership of two vehicles over a period of 1 year is necessary.
- Commercial vehicles with a one-year or longer payback duration.
Finance Your Loan for Commercial Vehicles Today!
The interest rate on loan for commercial vehicles differs with banks. While calculating a rate of interest on a loan for commercial vehicles sounds difficult. However, HDFC Bank offers attractive interest rates on the loan of commercial vehicles. HDFC Bank guarantees reasonable and customisable interest rate options. The bank has collaborated with top automobile companies to provide more customers. Visit HDFC Bank today and get the most on your vehicle loans.