Are you looking for a commercial vehicle for your fleet? Commercial vehicle loans for trucks are provided by several financial institutions. Read this write-up as it will guide you through the process and help you understand some important facts.

Whether you are a warehouse owner, tour operator or a transport business owner, you may require a commercial vehicle loan for a truck. This commercial vehicle is needed for logistics, business enterprises, contractors, and in the hospitality sector. Commercial truck financing from angel investors or other lenders may not be sufficient. Loans for trucks come under the heavy vehicle loan finance segment and you can take this loan from reputed financial service providers. You may need to get a loan for trucks for your business. But, how do you go about it? Here are some FAQs that will guide you through this process.

1. Can I take a commercial vehicle loan if I do not meet the eligibility criteria?

Yes, even if you do not meet the eligibility criteria, you can still apply for the loan with any co-applicant. If the financial profile and credit score of the co-applicant that you choose are satisfactory for the lender, you can be eligible to get the loan. It depends on the discretion of the lender, which can be a bank or a non-banking financial company.

2. Do I need to provide a guarantor for taking a commercial vehicle loan for my truck business?

Yes, a guarantor is required in order to obtain a loan for any kind of business vehicle. However, depending on the strength of your credit and profile, this requirement may be removed.

3. Who may I include as co-applicants, if I wish to obtain a commercial vehicle loan for my truck business?

You may be able to co-apply for a business vehicle loan with your spouse, sibling, or parents depending on the lender.

4. Can I sell the vehicle before I repay my vehicle loan?

No, a lender is not allowed to sell their vehicle unless the entire loan amount has been repaid by them. Once you clear the outstanding amount of the loan repayment, the bank/lender will issue an NOC after which the vehicle can be sold or kept.

5. After I pay the last EMI and all of my outstanding amounts, will I get the legal claim on my truck?

After the payment of the last EMI, the bank will cancel the right to keep possession of property. When this lien on your commercial vehicle is cancelled a loan closure letter will be issued, Form 35, and a No Objection Certificate to the RTO for removing the lien from the RC book. Then, a similar NOC will be issued to the insurance firm requesting them to remove the lien from the policy.

6. What are the eligibility criteria for a commercial vehicle loan?

●        A self-employed individual while taking this loan should have at least 2 years of business experience whereas a salaried borrower should have more than 2 years of employment stability.

●        Anyone from a private/limited company, partnership firm, trust, society, and association should be operational for a minimum of 2 years.

●        The borrowers are required to have minimum 2 years of residential stability.

Commercial vehicle loans are required by large, medium, and small-sized fleet owners. Taking a commercial vehicle loan can be tough but if you go through these FAQs, it will help you understand things that you should be aware of before applying for this loan.