For any transportation business enterprise it is extremely important to have a fleet of commercial vehicles. These commercial vehicles are used in the business and add to its productivity and helps generating a return as well. These can be trucks, busses, tippers, three wheelers or light commercial vehicles which can be used for many reasons such as transportation of goods from one place to another, collection of raw materials or a pickup and drop service for your employees. However, a whole fleet of cars or commercial trucks may prove to be very expensive. A commercial vehicle loan is hence availed by business entrepreneurs to finance their vehicle purchases.
What is a Commercial Vehicle Loan?
A commercial vehicle loan is sanctioned to owners of businesses when they want to purchase commercial vehicles like cars, busses or trucks to run their business effectively. Presently, a lot of lenders offer such commercial vehicle loans to business owners without many hassles. However there are some prerequisites the borrower requires to fulfill in order to fulfill the criterion needed to get such loans easily.
What Documents do you need for a Commercial Vehicle Loan?
In order to get a commercial vehicle loan, you will need to submit some documents to the lender and these are listed below:
- Proof of income.
- Proof of residence.
- A good credit score in the past.
- Copy of driver’s license of the applicant.
- Any other types of documents like bank statements, tax returns, utility bills.
Vehicles can you buy with a Commercial Vehicle Loan
Some of the commercial vehicles which you can purchase with a commercial vehicle loan are listed below:
- Trailers and Trucks
- Moving Vehicles
- Tow Trucks
- Construction Equipment like cranes or excavators
- Light and medium vehicles for transportation of resources
Rate of interest decision making in Commercial Vehicle Loan
The lender of commercial vehicle loans decide upon the rates of interest depending on the following factors:
- The credit score of the applicant.
- The repayment term of the loan.
- The type of vehicle to be purchased – new or second hand.
If your credit score is not good even then you can apply and get a commercial vehicle loan from some unique sources like online lenders or traditional lenders like credit unions, dealers or banks. However do realize that you might have to pay a much higher rate of interest on the loan due to the bad credit score,
Types of Financing available.
There are two types of financing applicable for a commercial vehicle loan and these are as follows:
- Direct Finance: In this type of finance option, applicants approach a bank or any other type of lender for the commercial vehicle loan.
- Indirect Finance: In this type of finance option, commercial vehicle loans are opted from the vehicle dealers.
Benefits of a Commercial Vehicle Loan
Some of the benefits of a commercial vehicle loans are as follows:
- The repayment term of commercial vehicle loan is usually four to five years. Although the monthly payment can be high you do not need long years to pay it off.
- The application process for a commercial vehicle loan is quite easy and free of any hassles.
- Commercial vehicle loans can finance different types of vehicles like buses, trucks, tippers, tankers, and much more.
- The documentation required is not very extensive or complicated.
Find out all the features, hidden charges, downsides everything about the lender and the loan before you sign. This will help you in the long run and you will not face any unpleasant surprises.
Guest author, Anna Wrench, is a knowledgeable and qualified blogger. Anna adores writing a blog on many topics, like Home Improvement, Automotive, Business, Health, Lifestyle, Entertainment, Pet, etc. You can find her on Twitter – @annawrench1315