Applying for a Commercial Vehicle Loan: Factors to consider
6 December, 2024
Synopsis:
- An individual or organisation desiring to buy a commercial vehicle in India can apply for a Commercial Vehicle Loan.
- You can choose from four types: new Commercial Vehicle Loans, old Commercial Vehicle Loans, Balance Transfers, and Top-up Loans.
- Before applying for the loan, you must consider the Commercial Vehicle Loan interest rate, application process, loan tenure, and repayment terms.
If your business depends on transportation as an essential part of its operations and needs appropriate vehicles, you may need a Commercial Vehicle Loan. Whether you plan to use a truck or bus for freight transportation, delivery, or mobile services, the best Commercial Vehicle Loan can help you drive your business forward.
If you are wondering how to get a Commercial Vehicle Loan, this guide can help.
Types of Commercial Vehicle Loans
There are four types of loans for commercial vehicles:
New Commercial Vehicle Loan: This loan is ideal for customers purchasing new commercial vehicles.
Used Commercial Vehicle Loan: This loan is offered to those purchasing all makes of used or pre-owned commercial vehicles.
Balance Transfer: Balance transfer is a facility where you can switch the lender of your existing loan. The process is instant, and you might get interest rates lower than your previous loan.
Top-up Loan: You can apply for a Top-up Loan if you have an existing Commercial Vehicle Loan and want to add another one.
Compare Commercial Vehicle Loan interest rates
The Commercial Vehicle Loan interest rate is an essential factor to consider when applying for commercial vehicle financing. The interest rate varies for different banks, financial institutions, and lenders. It can range between 10 to 15% and more.
The interest rate directly impacts your monthly repayments. It is affected by various factors, including your credit score, business turnover, credibility with the lender, the number of vehicles you own, and more.
You must compare the interest rates of different lenders or finance companies before applying for the loan to ensure you get the best deal possible. The interest rate changes based on your loan amount and selected loan tenure. A Commercial Vehicle Loan EMI calculator can provide more insights to help you make an informed choice.
Calculate the EMI using a Commercial Vehicle Loan EMI calculator
The Commercial Vehicle Loan EMI calculator makes calculating Equated Monthly Instalments easy. The tool is available online. You can enter your desired loan amount, interest rate, and tenure to estimate the EMIs you must pay to repay the loan. If the EMI is higher than what’s suitable for your budget, you can use the slider to change the loan amount, tenure, and interest rate. The revised EMI will be displayed on your screen.
The EMI calculator is quick and easy to use. It eliminates the chances of errors in manual calculations and helps you make a more informed decision.
Steps to apply for a Commercial Vehicle Loan
Follow these steps to apply for a Commercial Vehicle Loan with HDFC Bank and avail of the funding to grow your fleet:
Visit HDFC Bank’s nearest branch to request an application form. Alternatively, apply online on the website.
Fill out your personal and professional information, including your address and contact details.
Submit a copy of the Commercial Vehicle Loan documents required to proceed. You can upload scanned copies for an online application.
If you meet the eligibility for a Commercial Vehicle Loan, the bank will continue with the verification procedures.
Upon the completion of verification, the bank will disburse your loan.
Most lenders and financial institutions require minimal documentation for Commercial Vehicle Loan applications. Make sure you inquire about the processing fee and other charges to avoid last-minute surprises.
Consider loan tenure and repayment options
Before signing the loan document, you must understand the loan tenure and repayment terms. The loan tenure refers to the duration for which you are availing of the loan. It impacts the interest rate significantly. You can change the loan tenure according to your ability to repay the loan.
The repayment plan refers to how you will settle the principal loan amount and applicable interest. In some cases, you may be allowed to repay the loan EMIs through part-prepayment and loan foreclosure facilities.
Choosing the best Commercial Vehicle Loan
You must carefully evaluate the following key factors to choose the best Commercial Vehicle Loan.
Evaluate your business requirements
Start by understanding your specific business needs. Which vehicle do you require? How many of them do you need? The evaluation will help determine the type and size of loan best suited to your requirements.
Loan interest rate and repayment terms
The interest rate is another factor to consider as it impacts your EMI amount. Try to avail of a loan at the lowest interest rate. Besides, focus on the repayment schedule and the additional charges or fees associated with the loan.
Lender credibility
Pick a lender with experience and credibility in commercial vehicle financing. A reputable lender can offer customised solutions and valuable advice depending on your business requirements.
Understanding the top things to consider while acquiring a Commercial Vehicle Loan is essential to obtaining the right financing solution.
HDFC Bank provides financing solutions for all types of commercial vehicles, regardless of their manufacturer, model, or make. You can apply for high-value loan amounts to meet the vehicle’s entire purchase cost through an easy application process and obtain Top-up Loans if required.
Disclaimer: *Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.
