Automobile Loans At Commercial Wheeler Loan Interest Rate:

As opposed to other segments of Indian automobile loan market that focus primarily on acquisition of vehicles for personal use, the Commercial Vehicle Loan segment targets all businessmen and traders who may require vehicles for official use.

Funding is available to applicants who meet Commercial Vehicle Loan eligibility conditions, that differ only slightly with each bank, at Commercial Vehicle Loan  rate:

• Banks and other financial lending institutions usually target all kinds of business-houses: small and medium enterprises.
• Loan is extended to enable borrowers to purchase vehicles for their business use.
• Varied kinds of Commercial Vehicle Loan schemes include:

a)    Finance to purchase new vehicles.

b)    Acquisition of used and pre-owned vehicles.

c)    Loans to purchase tractors

• According to Commercial Vehicle Loan review, further, finance is also offered to in varied formats, depending on the purpose of the borrower:

a)    Take-over schemes

b)    Top-up loan schemes

c)    Engine financing

d)    Tyre financing

• This segment is also one of the fastest growing segments, aided by:

a)    easier lending terms and conditions of the banks,

b)    increased purchasing power of people,

c)    government policies, encouraging small and medium enterprises to be able to purchase assets.

• Above is indicated by the production level of the commercial vehicles: the period of 1999 to 2009, saw the output increase by over 3 times, as opposed to a mere 2.6 times in case of passenger cars, as per the Commercial Vehicle Loan review.

Commercial Wheeler Loan Interest Rate:

• Most banks charge interest on a flat basis at Commercial Vehicle Loan  rate.
• Further, Commercial Wheeler loan interest rate may vary with an individual profiles, with respect to age and location
• Below are some major banks and the Commercial Vehicle Loan  rate they charge, as stated on Commercial Vehicle Loan review:

a)    Axis Bank: 12% p.a. to 15% p.a.

b)    Bank of Baroda: 8% p.a. to 14.25% p.a.

c)    Canara Bank: 9.5% p.a. to 14.50% p.a.

d)    Dhanalakshmi bank: 10% p.a. to 16.00% p.a.

e)    Kotak Mahindra bank: 10% p.a. to 18% p.a.

• Commercial Wheeler loan interest rate is usually fixed and remains uniform throughout the tenure.

Commercial Wheeler Loan Eligibility Norms:

As per the Commercial Vehicle Loan review, following are eligible to apply for loans, according to the Commercial Vehicle Loan eligibility conditions:

• The minimum period that the business should have been in operation for, is usually equivalent to over 2 years.
• All companies, partnership firms and sole proprietorship owners
• Above organizations should all be registered.
• The owner should get the vehicle insured, preferably through the concerned bank itself.

Quantum Of Commercial Wheeler Loan:

• Loan amount is determined on the basis of various kinds of factors, such as:

a)    Value of vehicle: loans are usually offered such as to cover over 85% to 95% of the absolute cost. Some banks even offer to loans to cover the whole cost.

b)    Repayment capacity of the owner, that is determined by the proof of income supplied.

• According to some Commercial Vehicle Loan review, the quantum of loan is generally fixed at
• A margin of about 5% to 25% on cost of vehicle is considered.

Procedure To Apply For Commercial Wheeler Loan: Documentation:

All traders and business-owners eligible as per Commercial Vehicle Loan eligibility conditions of a particular bank may directly approach the nearest office, along with the following documents:

• Proof of identity
• Residential proof
• Proof of signature
• Proof of age
• Proof of income:

a)    Financial report of last two years

b)    Financial statements: Profit & Loss Account and balance Sheet

c)    ITRs filed of last two financial years

d)    Bank statement of last 6 months at least

• Collateral security is generally not required to be submitted.
• However, there is necessity of having a guarantor who is acceptable to the concerned bank.
• Processing fee is generally in the range of 0.10% to 3% on loan amount.
• Above fee is independent of the interest at Commercial Vehicle Loan  rate.

Tenure:

• Tenure of repayment of loan differs as per:

a)    Type of vehicle: old or new

b)    Age of the borrower or owner of business, who has satisfied the Commercial Vehicle Loan eligibility norms.

c)    Location of the business

• Usual range of tenure falls in the range of 3 years to over 5 years.

Repayment Of Commercial Wheeler Loan:

Repayment of loan is generally made through post-dated cheques of amounts of EMI, that include principal and interest at Commercial Vehicle Loan  rate.

Delay In Payment Of Commercial Wheeler Loan Emis:

• Many banks follow a policy wherein, usually a fee at 2% is levied on loan amount that is left outstanding.

It is independent of the interest at Commercial Wheeler loan interest rate.