Details You Need To Know About Commercial Vehicle loans

Are you a truck driver or fleet owner looking for the full details in order to apply for a commercial vehicle loan in India? If so, you need not look elsewhere, here is everything you need to know. 

The dream of owning a trucking empire is an important ambition of every truck driver in India. Hence, truckers start their inter-urban transportation business to earn maximum profitability and credibility with every last bit of savings they have. However, most of them fail at the venture’s inception due to a lack of or depletion of funds and the absence of a fleet of reliable and efficient vehicles to carry on the business without downtime.  

So, if you are a truck driver planning to own a fleet of your own, it’s best that you consider funding opportunities like taking a commercial vehicle-purchase loan. This way, you could buy a fleet of vehicles at half the price and pay the remaining amount borrowed from a financial institution like banks through instalments while having enough savings. 

Now, you might be curious to know the details, right? Well, we have put together the full details of commercial vehicle loans you could get in India, read on: 

Also Read: Check Out The Top 3 Truck Financing Tips

1. What is a commercial vehicle loan?

CV loans or commercial vehicle loans are money offered by a bank to its customers in order to purchase a commercial vehicle. The bank asks for a downpayment which is usually half the price of the vehicle and the rest of the amount will be paid by the bank which you would have to return as EMI.

2. Features of CV loans:

• You could get a CV loan at low-interest rates if your profile matches the criteria presented by the bank.

• Nowadays, the processing period of loans is fast if you present all the documents requested immediately.

• Some banks provide personal relationship managers right after initiating the loan process until the procurement of the vehicle.

• It usually takes around 7-days time for the disbursal of the loan amount.

3. Types of CV Loans:

New CV loan: A new commercial vehicle loan is for those who are set to purchase a brand-new commercial vehicle from the OEM dealership. The majority of the banks provide 100 per cent funding for purchasing fully built CVs. However, it also provides additional funds for the construction of the body of vehicles. 

Used CV loan: As the name suggests, it is the type of loan that is provided for financing a used commercial vehicle (second-hand). Under this financing, customers can get loans for used commercial vehicles that are under 15 years old. Up to 90 per cent of financing can be expected from most of the banks in India. 

Also Read: Is The Demand For Truck Drivers Increasing In India?

4. Documents for applying:

• First and foremost, you will be required to complete the loan form provided by the bank along with a photograph of the applicant.
  
• You will be asked for additional photographs (2 passport-size photographs)
  
• You would need to present a cheque for processing fee.
  
• You will be asked for providing Identity proof. Any one of these documents will be considered- Aadhaar Card/Voter’s ID card/Driving License/Passport.
  
• You will be asked for presenting residence proof- Rental agreement/Voter’s ID Card/Passport/Ration card/Tel bill or Elec. Bill/Trade License/ Sales Tax Certificate. (Any one of these.)
  
• If you are a government employee, you will be asked for signature verification proof like a Driving License/PAN Card/Registered Sale Deed/Govt. ID Card. (Any one of these.)
  
• An Income proof will also be asked by the banker- The last 3 months’ salary slips or the latest 6 months’ bank statement.
  
• You could also be asked for an updated ITR for the last 2 years. Other than this, you will need to submit a work experience proof in case you are a third-time buyer.
  
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5. Few Eligibility Criteria (new vehicle):

• Salaried employees should have more than 2 years of experience while self-employed individuals must have at least 2 years of business experience.
  
• Fleet operators/existing CV owners must have 1 to 3 years of vehicle ownership proof.
  

6. Few Eligibility Criteria (used vehicle):

• Must have a minimum of 1 year of ownership of at least two vehicles
  
• A relevant experience of 3 to 5 years or a 1-year repayment record of a commercial vehicle loan.
  

Thus, these are the full detail you need to know to apply for a commercial vehicle loan in India.

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