A Guide to Choosing the Right Commercial Vehicle Loan Offer

For many business owners who are considering purchasing a commercial vehicle, the constantly rising market prices have become a major obstacle. However, to ease the purchase, business owners can avail corporate or private finance for a commercial vehicle purchase. With financial assistance, business owners only have to pay a small part of the total vehicle price, and the remaining amount can be paid off in easy monthly installments.

From a commercial truck loan to a pickup or bus loan, there are several options available for business owners to choose from. There are multiple lenders in the market today, offering a range of commercial vehicle financing solutions, and choosing the right commercial vehicle loan offer requires some thought. Here are some of the top factors to take into consideration while searching for a loan to fund your commercial vehicle purchase:

Type of Loan

There are several different types of commercial vehicle loans, depending on the type of purchase you’re making. For example, if you are buying a new commercial vehicle, you can choose from a bus loan, small and light commercial vehicle loan, and medium and heavy commercial vehicle loan. On the other hand, if you’re buying an old vehicle, you’ll have to apply for a used commercial vehicle loan.

Loan Amount

For used commercial vehicles, borrowers may be able to apply for a loan that covers up to 90% of the value of the commercial vehicle. On the other hand, for a new commercial vehicle, you can get up to 100% of the ex-showroom price of the commercial vehicle financed. Choosing the right loan amount and down payment will affect repayment as well.

Rate of Interest

The rate of interest applicable on a loan can vary from one lender to the other. While the key determinant is the applicant’s credit history, several other factors can impact the loan interest rate as well. While availing a loan, it is always recommended to compare different interest rates offered by lenders to make an informed decision.

Loan Tenure

Another important consideration while availing a commercial vehicle loan is the loan tenure. Almost every lending institution offers several tenure options to choose from (usually ranging from 5 to 10 years). A longer tenure means lower EMI but higher interest, so choose the loan tenure based on your repayment capacity.

Understanding the various factors that impact your commercial vehicle loan can help you choose the best-suited loan offer.