Commercial vehicles are a necessity for many businesses and industries. However, they are more expensive than other vehicles on the market. It might be out of budget or financially straining for many business owners to pay the total cost, especially while buying many new commercial vehicles for their business requirements. Recently, the used commercial vehicle market in India has grown in abundance, making it easier for business owners to buy their desired commercial vehicles to fulfill their business needs. There are many banks and NBFCs offering loans for new and used commercial vehicles. However, taking a loan is not easy, so you should make a wise decision. Here is a guide to help you apply for a loan for a used commercial vehicle.
Consider the Loan Amount
The first step of the loan application process is to evaluate your loan requirements. Remember, the loan amount given differs from bank to bank. Many financial companies fund up to the 100 per cent cost of the vehicle on some specific terms and conditions. However, some loan providers ask borrowers to pay a certain down payment. Thus, you should be aware of the amount and be prepared for how much down payment you can make.
Check Interest Rates
Usually, the interest rates on used vehicles are higher compared to new vehicles. The rate of interest depends on many different factors, such as market discounts on vehicles, vehicle type, credit score, customer profile, etc. Also, the interest rate may be fixed or variable. So, applicants should carry out market research, compare interest rates on used commercial vehicles loans from diverse lenders, and then select the right one.
Check Repayment Structure
This is also a crucial point that you should consider even before planning to apply for a commercial vehicle loan. Many loan providers offer repayment tenures of up to 60 months or five years. However, if you wish to pay off your loan as soon as possible to reduce the interest amount, ask directly from the lender about the prepayment fees and any penalties if you cannot pay the amount during the tenure period.
The above tips and a little research can help you apply for used commercial vehicle loans.