Commercial Vehicle Loan

Just like you can take auto loans for buying a vehicle for personal use, you can take commercial vehicle loans to purchase a vehicle for your business needs. Read on to know more about commercial loan interest rates, eligibility, and the documents required.

Learn More About: Cars Between Rs 3 Lakh to Rs 5 Lakh in India

What is a Commercial Vehicle Loan?

A commercial vehicle refers to a vehicle that is used for business purposes by self employed individuals, organizations, or firms. Transportation businesses can also opt for these loans to purchase small, medium-sized, or large vehicles to add to their fleet.

They are a little different from auto loans, car loans, or two-wheeler loans as these are majorly bought for personal use. Let us look at the types of commercial vehicle loans available in the market.

Types of Zero Down Payment Commercial Vehicles Loan

Some banks offer loans for the 100% on-road price of the commercial vehicle that you want to purchase, which makes them a zero down payment loan. You don’t have to invest any money and can purchase the vehicle totally on EMI. 

Here are the three types of commercial vehicle loans available - 

New Commercial Vehicle Loan

You can apply for this type of loan if you want to purchase a new commercial vehicle for your business use. The type of vehicle doesn’t matter in this regard and can be of any size.

In this case, you can get zero downpayment commercial vehicle loans. Your vehicle acts as your collateral, which helps you to procure the loan with ease.

Pre-owned Commercial Vehicle Loan

A pre-owned commercial vehicle loan is taken for purchasing a second-hand or used commercial vehicle. You can opt for this if a new vehicle is out of your budget. 

Vehicles up to 15 years old can be purchased with such loans. This can’t be a zero downpayment commercial vehicle loan as banks only finance up to 90% of the total price if it's a pre-owned vehicle. 

Refinance of Commercial Vehicle Loan

You can also opt for refinancing your commercial vehicle loan. It may involve taking a loan on an existing vehicle that no longer has a loan running, or taking over an existing commercial vehicle loan to provide additional finance.

This may help in reducing your existing EMIs or using a free vehicle to meet working capital needs.

Commercial Vehicle Loan Eligibility Criteria and Documentation

You can apply for a commercial vehicle loan if you are -

As a commercial vehicle is to be used for business purposes, the documentation requirement is a little more extensive than when applying for an auto loan for personal use. Here are the documents that you will need to apply for a commercial vehicle loan - 

Commercial Vehicle Loan Interest Rates

The interest rates will vary greatly depending on the bank, and your creditworthiness. Here is a list of the major banks and their commercial vehicle loan interest rates -

Bank

Interest Rate

Processing Charge

HDFC Bank 8.33% - 17.03% Up to 1.50%
Axis Bank 9.30% - 16.00% Up to 1.5%, minimum Rs.7,500
IDFC First Bank 7.50% - 30.00% Up to 5% for exposure above Rs.5 Lakh
Kotak Mahindra Bank Limited Up to 24% Up to 3.00%
Bandhan Bank 10.75% - 18.04% Up to 1.00% + applicable GST

Note: These rates can change at any time at the discretion of the bank. The above rates are prevalent as on September 2023.

How to Apply for a Loan from Commercial Vehicle Finance Companies

The process of applying for a zero down payment commercial vehicle is not very different from applying for a business loan. Here are the steps you can follow to apply for a commercial vehicle loan -

STEP-1: For online application, visit the website of the bank of your choice and go to the ‘Commercial Vehicle Loan’ section. 

STEP-2: Click on the ‘Apply Online’ button, and proceed with uploading your documents as prompted. You will hear from the bank within 4-5 working days.

STEP-3: For offline application, visit your closest bank branch with photocopies of your documents.

STEP-4: Request for an application form for ‘Commercial Vehicle Loan’, and fill it up.

STEP-5: Submit the duly filled and signed application form, along with your documents. You will hear back from the bank in a couple of days.

Instant Personal Loans from moneyview as Commercial Vehicle Loans

In case you are in a hurry for funds to buy a commercial vehicle, you can consider instant personal loans from moneyview. There are many benefits to this including minimal documentation, affordable interest rates, easy application process, and quick disbursal. 

Here are the only documents that you need to apply for a moneyview personal loan - 

The eligibility criteria are also very inclusive making it accessible to all -

Conclusion

Commercial vehicle loans are a great option if you are a business owner looking for funds to purchase a vehicle for business purposes. You must make sure to check the fees, charges, and tenures of various banks before deciding to borrow from one.

Checking your EMIs beforehand using an EMI calculator will also help you to manage your finances better. 

In case you are looking for a personal loan to invest in your business or to purchase a vehicle, you can opt for moneyview personal loans. To know more about it, you can download the moneyview app or check out our website.

Commercial Vehicle Loan - Related FAQs

The interest rate of a commercial vehicle loan will depend on multiple factors like your credit history, price of the vehicle, credit score, etc. But in general, commercial vehicle loan interest rates start from 7.50% per annum.

You can get a truck on EMI by applying for a commercial vehicle loan. You will have to submit applicable documents for the same.

Commercial vehicle loans are secured loans, as the vehicle in question acts as collateral.

Commercial vehicle loans are advantageous as you can get a bigger loan amount at affordable interest rates. You can also get longer tenures if you have a long and promising credit history.

No, you cannot use your personal vehicle for commercial purposes. You can, however, convert your personal vehicle to a commercial vehicle by getting in touch with the concerned authorities.

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