A Complete Guide about how to Avail Commercial Vehicle Loans?

A commercial vehicle is used for various purposes, including transporting passengers, goods, commuting, etc. These activities are carried out through a commercial vehicle by an individual or business for profit. Commercial vehicles offer a great way to diversify revenue sources and increase income. Private intercity buses are a great example of commercial vehicles that generate a good sum of money by transporting people from one city to another. The increase in fuel prices has surged the demand for mass passenger vehicles. People find it more affordable to commute using these commercial vehicles. Read on to learn more about commercial vehicle loans.

What Are Commercial Vehicle Loans?  

A commercial vehicle loan is a credit tool used to finance the purchase of various commercial vehicles. Most people opt for a commercial car loan to advance their transportation business. Commercial vehicle loans can also be used to purchase other vehicles like buses, tankers, trucks, three-wheelers, etc. The vehicles purchased using a commercial vehicle loan are used only for business or commercial activities. Reputed financial institutions like Fullerton India offer flexible loans at the best commercial vehicle interest rates. 

Different Types Of Commercial Vehicle Loans 

Financial institutions offer different types of commercial vehicle loans to serve a wide range of customers. Here are three prominent types of commercial loans offered to borrowers. 

  1. New Commercial Vehicle Loans 

New commercial vehicle loans are offered to borrowers who need money to finance the purchase of brand-new commercial vehicles. Financial institutions can fund up to 100% of the value of the vehicle’s base frame (chassis). Borrowers can also get additional funds for the vehicle’s body in some cases.  

  1. Old Commercial Vehicle Loans

Old commercial vehicle loans help people purchase used commercial vehicles from their first owners. Borrowers can get financial aid for buying used vehicles up to 15 years old. Most lending institutions offer up to 90 percent of the used vehicle’s current value (after factoring in the depreciation). Purchasing even old heavy-duty vehicles can be pretty expensive, and used commercial vehicle loans can easily bridge the gap. 

  1. Refinancing Commercial Vehicles 

Another important type of commercial vehicle loan includes refinancing. In this case, the lending party takes over an existing loan on a commercial vehicle. People can also obtain additional funds through refinancing. Refinancing is mostly done to benefit from a lower interest rate on a new loan. This also reduces the monthly EMI burden for the borrowers. 

Who Can Avail Of Commercial Vehicle Loans? 

Anyone who matches the eligibility criteria set by the lending institution can take commercial vehicle loans. Here’s a list of people/businesses who mostly opt for commercial vehicle loans. 

  • Individuals 
  • Small and large-sized fleet owners
  • Proprietorship and Partnership firms
  • Public & Private Limited Companies
  • Trusts and Societies 
  • Schools and Universities 

How To Apply For A Commercial Vehicle Loan?

Making a commercial vehicle loan application is easier than ever in today’s digital era. Modern financial institutions like Fullerton India allow applicants to fill up and submit their applications online. Here’s a quick step-by-step guide for commercial vehicle loan applications.

  1. Visit the website and navigate to the commercial vehicle loan section
  2. Now choose an option from the ‘purpose of loan’ section
  3. After this, enter the required loan amount for purchasing the commercial vehicle
  4. Now choose your nature of employment and fill in the required personal details
  5. After this, a representative from the customer support team will get in touch with you regarding the next steps.

Documentation Requirements For Commercial Vehicle Loans 

Here is a list of documents required for commercial vehicle loans.

  • Correctly filled application form along with photographs.
  • Standard KYC documents, including ID proof, residence proof, signature verification proof, PAN card, etc.
  • Income proof such as salary slips, ITR for the last two years, photocopy of PAN, bank account statement, etc.
  • Other documents may include vehicle details and valuation report, insurance and RC copy of the vehicle, etc. 

Final words

Buying a commercial vehicle can be financially draining, and most individuals can’t afford it alone. Commercial vehicle loans offer a great way to finance the purchase of new and old commercial vehicles. You can even use it for refinancing an existing commercial vehicle loan for better terms and interest rates. Choosing a reliable financial institution like Fullerton India is a must to get the best deal. 

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