For new commercial vehicles

• Salaried borrowers should have more than 2 years of employment stability and self-employed individuals must have at least 2 years of business experience.
• Private/Limited companies, partnership firms, trusts, societies and associations must be in existence for minimum 2 years.
• Fleet operators and other existing vehicle owners require to have 1 to 3 years of vehicle ownership proof of one or two commercial vehicles.
• Private/Limited companies, partnership firms, trusts & societies Companies need to provide 2 years of audited financials.
• Internal/external guarantor needed sometimes in case of individuals, first-time buyers and fleet operators/owners.
• The customers need to have minimum residential stability of 2 years. *(Borrowers with lesser stability are subjected to certain terms and conditions).

For old commercial vehicle Loans

• Borrowers applying for a commercial car loan for old vehicles need to fulfil the following criteria along with the basic ones:
• Customers need to have relevant experience of 3 to 5 years depending on individual profile.
• Minimum 1 year of ownership of at least 2 vehicles.
• At least 1 year repayment track of commercial vehicles

Vital Aspects of a Commercial Vehicle Loan

• Application process– At first, the borrower needs to fill up an application form online, then furnish all the necessary documents and finally provide the details of the personal guarantor if required.
• Loan approval– The bank will run a check to verify the documents and borrower’s eligibility. If the borrower is found to be eligible, the loan will be approved within 2 to 5 working days from the time of documentation.
• Processing charges– Banks ask for a minimal non-refundable amount for processing a commercial vehicle loan. This amount depends on the amount of the loan applied for and generally ranges from 2% to 4% of the loan amount.
• Loan Amount/Margin– The maximum loan amount for commercial vehicles varies from customer to customer based on their individual profile. A borrower can get up funding of up to 100% of the vehicle’s chassis.
• Repayment tenure– The repayment tenure for a commercial vehicle loan usually starts from 6 months and goes up to 60 months (5 years). The borrower is allowed to repay the amount in easy monthly EMIs.
• Security/collateral– While certain banks offer loans for commercial vehicles without any security or guarantor, some require a guarantor or co-applicant depending on the borrower’s profile and the product.
• Pre-payment of loan– The borrowers can prepay the loan after 6 months of availing it by paying a pre-payment fee of up to 5% of the remaining loan amount. However, part pre-payment of the loan is usually not allowed.

If you have a question that deals with clients, customers or the public in general, there is bound to be a need for the FAQ page.

Your bank will assess your repayment capacity while deciding the home loan eligibility. Repayment capacity is based on your monthly disposable / surplus income, (which in turn is based on factors such as total monthly income / surplus less monthly expenses) and other factors like spouse’s income, assets, liabilities, stability of income etc.

The main concern of the bank is to make sure that you comfortably repay the loan on time and ensure end use. The higher the monthly disposable income, higher will be the amount you will be eligible for loan. Typically a bank assumes that about 55-60 % of your monthly disposable / surplus income is available for repayment of loan. However, some banks calculate the income available for EMI payments based on an individual’s gross income and not on his disposable income.

The amount of the loan depends on the tenure of the loan and the rate of interest also as these variables determine your monthly outgo / outflow which in turn depends on your disposable income.

You repay the loan in Equated Monthly Installments (EMIs) comprising both principal and interest. Repayment by way of EMI starts from the month following the month in which you take full disbursement.

The longer the tenure of the loan, the lesser will be your monthly EMI outflow. Shorter tenures mean greater EMI burden, but your loan is repaid faster. If you have a short-term cash flow mismatch, your bank may increase the tenure of the loan, and your EMI burden comes down. But longer tenures mean payment of larger interest towards the loan and make it more expensive.

Yes, most banks allow you to repay the loan ahead of schedule by making lump sum payments. However, many banks charge early repayment penalties up to 2-3% of the principal amount outstanding.

Prepayment penalty may vary according to the reasons and source of funds – if you obtain a loan from another bank for pre-payment the charges are usually higher than when you pay from your own sources. However, you may credit more than your EMI amount into your loan account on a periodic basis and bring down your interest burden as and when funds are available with you.

Most banks do not charge a pre-payment penalty if you deposit more than your EMI payable on a periodic basis. Please check such stipulations while availing the loan. cfs is the Top No1 in commercial vehicle loan in Kerala | Kochi | 2023