Old Commercial Vehicle Finance: Its Meaning, Eligibility & Types
An old commercial vehicle loan is a financial solution that is welcomed by customers who earlier struggled to manage funds to purchase used vehicles for commercial purposes. A country's economy cannot function without commercial automobiles. Without them, companies would be unable to provide their clients with last-mile logistical services.
What is a Used Commercial Vehicle Finance?
Used commercial vehicle finance is the loan offered by vehicle financing companies to the borrower to purchase a second-hand yellow-plated vehicle for commercial use. This loan is an excellent option for customers who want to avoid the higher cost of buying a new commercial vehicle. So, businesses expanding their vehicle fleet or that want to replace their existing commercial vehicle can benefit from used commercial vehicle finance.
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Used Commercial Vehicle Finance: Eligibility Criteria
Here are some typical eligibility requirements for used commercial vehicle financing:
Valid
Commercial License: A driving licence is an official
document that the government of India issues to its citizens, attesting to the
holder's competence to operate a motor vehicle in open spaces and on highways.
After passing the written and practical exams, people are given this licence.
Having two years of valid commercial license is necessary for availing a loan
for a used commercial vehicle.
Property
Ownership: Anyone can avail of a used car commercial loan
against a collateral-like property. Delivered to customers that own either
residential or commercial properties.
Possesion of
More Than One Commercial Vehicle: This makes it easier for the lender to be certain that the borrower
will be in a steady financial position to make payments on schedule. Being the
owner of multiple commercial vehicles promotes confidence among lenders.
Types of Old Commercial Vehicle Loan
Following are a few types of commercial vehicle loans available:
Repurchase Loans
This type of
loan is for customers who want to purchase a used commercial vehicle. The loan amount is decided on the total valuation of the
vehicle, which is usually a certain percentage.
The commercial vehicle’s valuation is decided on the fair market value
that is based on factors such as the vehicle’s age, condition, and mileage.
Repurchase loans are excellent for customers who want to avoid the upfront cost
of purchasing a commercial vehicle, as they can spread the cost over a longer
period on EMIs.
Refinance Loans
Refinance loans
are offered to businesses that already have existing vehicle loans and want to
use the loan amount to fulfill their business needs. These loans can help
businesses to utilize their cash flow in other important business functions and
improve their financial flexibility.
Balance Transfers
A balance
transfer is a process by which a customer can move their existing old commercial vehicle loan from one lender to another. The is usually preferred to
take advantage of better offers and features by the new lender, such as lower
interest rates, reduced EMIs, or longer repayment periods. Balance transfers are
a good option for customers who want to improve their loan terms and reduce
their financial burden.
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