Commercial Vehicle Loan

A commercial vehicle refers to a vehicle that is used for business purposes by self-employed individuals, organizations, or firms. Loans taken to finance such vehicles are known as commercial vehicle loans.

Read on to learn 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

Types of Zero Down Payment Commercial Vehicle 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. 

There are three types of commercial vehicle loans available - 

• New Commercial Vehicle Loan

As the name suggests, this loan is taken out to purchase or finance a new commercial vehicle for your business use. The vehicle can be of any type or size.

The vehicle you purchase acts as the collateral helping you to procure the loan without any other downpayment.

• 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 you have chosen a second-hand vehicle.

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. 

• Top-Up Loan

You can opt for a top-up loan on your existing commercial vehicle loan. Banks may approve this if you have a good track record and CIBIL score. 

The money obtained can be used as working capital. You have a higher chance of getting a top-up loan approved by the same bank that you have your commercial vehicle loan with.

• Balance Transfer

This refers to transferring your existing loan to a new lender. Often a new lender may offer you lower interest rates, or better terms and conditions which are worth taking advantage of.

However, it is advised that you calculate your expenses, including the transfer fee, to estimate how much you will be saving.

Commercial Vehicle Loan Eligibility Criteria and Documentation

The eligibility criteria for a loan vary depending on the lender you choose. Here are some common criteria that most banks will require for a commercial vehicle loan. 

You should be -

• An Indian citizen

• the proprietor of a small or medium-sized business 

• Co-partner at a firm / School, college, or any other educational institution

• Society, Hindu undivided family, one-person company, or trust

• Transporter

• Salaried or self-employed and want to co-apply with a family member

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 - 

• Identity Proof

• Residence Proof

• Income Proof: Form16, salary slips, or ITR

• Documents to prove experience, in case you are a first-time buyer

• Details of other vehicles, if you have a fleet

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 -

Note: Rates mentioned as of 4th June 2024, and can be revised by the bank without any notice. Please check with the bank before applying for a loan.

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. You might find it under the loans and advances section or the MSME section of the website.

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 an application form for a ‘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. You can get instant loans of up to Rs.10 lakh without any collateral or guarantor. 

There are many benefits to this including minimal documentation, affordable interest rates, easy application process, and quick disbursal. The whole process is online and can be completed from your mobile phone itself.

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

• Your age must be between 21 and 57

• If you are salaried, your minimum in-hand income must be Rs.13,500

• If you are self-employed, your minimum in-hand income must be Rs.15,000

• Your income must be credited directly to your bank account

• You should have a minimum CIBIL or Experian score of 650

Conclusion