Securing Loan for a Commercial Vehicle

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Source - www.aufin.in
Source – www.aufin.in

A small yet inspiring story about my uncle who stays in Coimbatore. I would like to share with you guys.Mr.Uday Shankar’s story, A humble person, dedicated to work, he used to work with transport company for about 4 years. Having slogged day and night, leaving no time for his personal life. He worked steadily and carefully, but there was a time when he told himself. I will work for myself. He pulled himself by his bootstraps and ventured his own transport company.The first hurdle was financing. The commercial vehicle loan in Coimbatore was blessing in disguise for him. He was relieved after securing commercial vehicle loan. If you compare the interest rates in Coimbatore are at par with other cities.

A decade ago, Commercial Vehicle loan were uncommon in India.Those who were from affluent has access to it.The common man was beyond the reach.They feared the risk or were more interested in saving the money.Cite an example of Mr. Uday Shankar.Owning a commercial vehicle was of low priority.Earlier it was a dream but now it’s a reality.Securing  Commercial Vehicle loan used to be big headache earlier.These days Commercial Vehicle offers a lot of flexibility in terms of rate of interests, maximum tenure etc. The criteria and conditions for sanctions are relaxed to help extend the loan to the needy people at an attractive rate of interest and minimum processing charges.

Main criteria are: –

  1. Look at the Credit history
  2. Type of Vehicle – new or used vehicle,
  3. Tenure of the loan.

Before applying for a commercial vehicle loan pre-requisite criteria such as –

Be ready with following documents –

  1. Income proof,
  2. Residential proof that can be verified,
  3. Borrower’s credit history should be good,
  4. Borrowers must have valid driving license.
  5. Also, keep documents ready for check such as telephone bills, Utility bills, bank statements, income tax returns etc.

The main security for this type of loan is a vehicle itself.The vehicle which is financed is hypothecated as a security.

Source- www.drive.com.au
Source- www.drive.com.au

Banks offers a variety of commercial loan products so that it’s very easier to obtain and faster processing which help grow the business.  Basically, the loan process is very simple and hassle-free. Flexible financial solutions provided to meet individual requirements. It covers the broad spectrum of customers like individuals, first-time users, partnership firms, private and public limited companies, Large, medium, small –size fleet owners. It would be required for expanding a small business or accumulating funds for the new purchase. More than 90% of commercial vehicles are sold are through finance options. If you look at the balance sheet of the banks the percentage of commercial vehicle loans when compared to the overall asset size of the bank is very high.The no. of products under commercial vehicle loan category offered by banks and demand for customers for loans is high. With Vehicle financing, Its endeavor to create entrepreneurs in every section of society.

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