Most of us don’t know the exact purpose of the loans we have come across in our life. Also, most people don’t exactly know what a commercial vehicle loan is, the purpose it serves and what is the process for availing them. Commercial vehicle loans are for individuals or businessmen for financing their commercial vehicles. 

Individuals who are into the transportation business mostly opt for this loan. Commercial vehicle loan options are available for vehicles like transit mixers, buses, tippers and other heavy, small and medium-sized vehicles. In India, there are numerous banks and NBFCs which offer commercial vehicle loans for business individuals who are in need.

Financial providers offer loans for both used and new commercial vehicles depending upon their business needs. There is also a facility for topping up your existing commercial vehicle loan which is subject to certain conditions.

Loan Process:

The financial providers offer both online and offline application forms which you need to fill and submit for applying for a commercial vehicle loan. After the application is loaded, you will have to provide the necessary documents for the loan process. The documents will include address proof, ID proof, experience proof in the relevant field, bank statements for the past six months and the track record for your previous loans (if availed).

The individual should also submit their past two years of income tax returns, audit sheets, profit & loss statements. Also, they should provide the proof for the list of vehicles previously owned and their RC book. When you are asking for a higher amount of funding, some financial institutions will ask for transportation contracts.

Who can avail this loan?

You can apply for a loan individually or co-apply with your business partner depending upon how you want it to be. When you are an individual, you can include any of your family members to get a joint loan. The minimum loan amount which you can get is Rs.1 lakh, and when you are a large corporate, you can get up to Rs.5 Crore.

Loan amount & tenure:

Depending upon your requirement, the loan amount will vary. The fund which you get will cover 100% of the chassis cost and that can be extended for body funding as well when you mention the requirement.  

The loan tenure will vary depending on the loan you choose, which usually ranges from 6 months to 60 months. 

Interest rates:

Depending upon the financial provider, you choose your interest rate varies, which ranges between 10 to 15%. Whether you are a  self-employed, entrepreneur or corporate, it will also impact your interest rate. The interest rate depends on factors like the number of vehicles you want, repayment plan and your credit score. 

Other than that there are some financial institutions which will charge extra as processing fee, vehicle valuation charges and stamp duty. The costs will be from 2 – 4% depending upon your financial provider, and the stamp duty will be 2% of your loan amount. 

When you know all the above things you will by not chance miss out getting a loan. Making sure of all these will make it easy for you to apply and get approval for your loan.