Car loans are taken by someone who wants to buy a car for their personal use. Commercial Vehicle loans are loans that are taken for buying commercial vehicles like buses, trucks, heavy mixers or other small vehicles. These loans are offered by many NBFCs and banks in India. These loans are available for old vehicles, new vehicles and as well as vehicle refinancing and can be availed by an individual who is self employed, a trust, an organization, and various forms of business entities, school, colleges and so on. Like any Loan, there is set procedure and eligibility criteria that must be followed by the applicant for getting the loan approved.

Procedure for getting a car loan for commercial use in India:

If one intends to use a car for commercial purpose then they will have to take a commercial loan for it. Car loans cannot be used to finance cars that are meant for commercial use; one has to opt for a commercial loan for buying a car that will be used commercially. Above we listed a few aspects about commercial Vehicle Loans. Here we discuss the procedure involved in getting a commercial vehicle loan.

Depending on the lender, the process may vary slightly but the basic conditions will remain same. The process starts with the applicant filling out the required application form for the loan in the prescribed format as laid down by the lender. Along with the form the required documents need to be attached.

Documents required include address proof, identity proof, photographs (number as specified by the bank), signature verification proof, bank statements from past six months, and details about existing and past loans. Apart from the IT returns of the last two years, balance sheet, profit and loss statements, Form No 16, updated ITR for last 2 years also need to be submitted. Vehicle record of vehicles owned along with the books of registration certificates, existing vehicle ownership proof, vehicle details, valuation report and insurance details with RC copy must also be submitted. Some banks may also require the applicant to submit contracts of transportation and also get a guarantor for the loan.

Applicant must be within the age limit as specified by the lending agency. The applicant also has to pay the processing fee along with the application. The lender accesses the credit report of the applicant and if the CIBIL score is as per the lender’s eligibility requirement then the application is processed further else it may be rejected at the initial stage. A low rating could mean outright rejection of the loan application or the lender may agree to lend on certain additional conditions (may ask for a co-borrower) or sanction the loan at a higher interest rate. If the loan application is approved then the processing is generally completed in 2 to 5 days. The eligibility criteria may vary slightly for new commercial vehicle loans and old commercial vehicle loans.

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