Commercial Vehicle Loan

A commercial vehicle loan is a financial product that offers individuals and businesses financial help to purchase old and new vehicles for commercial purposes. This loan is usually offered to self-employed individuals, organisations, partnerships and those involved in the transportation service. With this loan you can purchase trucks, buses, tankers, tippers, small commercial vehicles, electric vehicles, hybrid commercial vehicles, CNG vehicles, ambulances and caravan vehicles.

The commercial vehicle financing loan offers flexible loan amounts of up to 2 Crore at low interest rates with minimal to zero down payment.

Interest Rates For Commercial Vehicle Loan

The commercial vehicle loan interest rates vary depending on different lenders, the borrower’s creditworthiness and loan amount. Understanding the different rates offered by different lenders can help you choose the right loan with the best terms.

The general interest rates offered by lenders for commercial vehicle loan are:

Interest rate 7.50% - 30.00% p.a.

Commercial Vehicle Loan Lenders

A commercial vehicle loan is offered by many banks and NBFCs. These lenders offer businesses and individuals financial aid to purchase vehicles for commercial or business use.

Below is a list of some of these lenders along with their interest rates:

Lenders Interest rates
IDFC First Bank 6.50% - 30.00% p.a.
HDBFS Bank 5.00% - 36.00% p.a.
Mahindra Finance 6.00% - 26.00% p.a.
State Bank of India 8.40% p.a. onwards
HDFC Bank 7.82% - 10.09% p.a.
Kotak Mahindra Bank Up to 24.00% p.a.
ICICI Bank Will depend on the customer's credibility.
Axis Bank 9.30% - 15.55% p.a.
Bandhan Bank 10.75% - 13.15% p.a.
Note: These rates are indicative and subject to change. Always check with the bank for the most up-to-date information before making any investment decisions.

Eligibility Criteria for Commercial Vehicle Loans

  • Applicants must be an Indian Citizen.
  • Must either be salaried with 2 years of employment stability or self-employed with 2 years business continuation.
  • Applicants must fall under proprietorship, partnership, trusts, private limited companies and public limited companies.
  • School, college or educational institutions are eligible.
  • Society, HUFs, and one person companies are eligible.
  • Transporters and hospitality sectors with 2 years of experience.
  • Income Tax assessee
  • MSMEs registered under the UDYAM portal or having an UDYAM registration certificate.

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Commercial Vehicle Loan EMI Calculation

Taking a commercial loan vehicle comes with a repayment structure that ensures equal monthly instalments. This allows borrowers to strategically plan their business’s monthly financial budget. Knowing the EMI for the loan before availing it will help borrowers plan their monthly targets accordingly.

Borrowers can find out their estimated EMI by using an online commercial vehicle EMI

calculator or by manually calculating using the formula: EMI=P * r * (1 + r)n(1 + r)n-1
P is the principal amount,
r is the interest rate,
n is the tenure.

Monthly EMI 86
Principal Amount 1,000
Total Interest 32
Total Amount 1,032.00

Year Month Principal (A) Interest (B) EMI (A+B) Balance Loan Paid to Date (%)

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Documents Required For Commercial Vehicle Loans

Documents required for business vehicle finance will differ from one lender to another. Refer to your preferred lender’s website for more accurate information. However, here are the general documents asked by lenders:

  • Age proof: Aadhaar, Voter ID, Passport.
  • Identity proof: Aadhaar, PAN card.
  • Address proof: Rental agreement, Ration card, Utility bills.
  • Income proof: 6 months bank statement, Form 16, ITR for the last 2 years.
  • Experience proof: Driving licence, Registration copy of commercial vehicle owned, Property ownership, Proprietorship declaration, etc.
  • Fleet list: List of vehicles currently in ownership along with supporting documents.

Types of Commercial Vehicle Loans

Commercial vehicle financing comes in various types to cater to the diverse needs of businesses involved in transportation, logistics, and other related industries. Let’s take a look at the various types of commercial vehicle financing options:

  • New commercial vehicle loan: This type of loan can be used specifically for the purchase of a brand new vehicle for business utilisation.
  • Used commercial vehicle loan: This type of commercial vehicle loan is offered by lenders for businesses to purchase all kinds of used commercial vehicles. Lenders usually offer a loan of up to 90% of the purchase price.
  • Commercial vehicle refinance loan: This type of loan is taken as a loan against commercial vehicles that are no longer under an existing loan with a lender. Borrowers can get up to 100% of the current vehicle market value.

Features & Benefits of Commercial Vehicles Loans

Business auto financing offers important features and benefits that support businesses seeking to purchase commercial vehicles. These features and benefits are highlighted below:

Flexible Loan Amount

Borrowers can get a loan
of up to 2 Crore.

Fast Processing Time

The loan is quickly
processed with the right

Secured and Unsecured

The commercial vehicle
loan can be secured or

Competitive Interest

Enjoy low interest rates
starting from 9.50% p.a.

Variable Loan Tenure

Enjoy a loan tenure of up
to 84 months.

Promotes Asset Building

Enables businesses to own
valuable assets with resale

Exploring Government Programs for Commercial Vehicle Financing

The government of India has played a major role in supporting businesses to purchase commercial vehicles for business use. Some of the schemes offered by the Central and State government are listed below:

  • Swavalambi Sarathi Scheme: This is a scheme offered by the Government of Karnataka to subsidise the purchase of taxi, goods vehicles and passenger auto rickshaws. Eligible applicants are subject to 50% subsidy of the value of the vehicle or a maximum subsidy amount of 3 lakhs.
  • Union Parivahan Scheme: This scheme is offered to all businesses falling under the category of Individuals, Proprietorship, Partnership concerns (including LLP), Limited Companies, and HUFs engaged in transportation business or any other business. For the sole purpose of purchasing a brand new vehicle. With this term loan you will get a maximum loan amount of 500 lakhs.

How Commercial Vehicle Loans Can Boost Your Business

A commercial loan vehicle can provide several advantages that contribute to the growth and efficiency of your business. Here is how availing a commercial vehicle loan can help boost your business:

  • Expansion opportunities: Commercial vehicle financing helps you acquire a new vehicle which can help capacity to take on more projects, serve new markets and increase overall business opportunities.
  • Improved operational efficiency: Getting a commercial vehicle can help you gain control over transportation logistics. Which will lead to improved operational efficiency, timely deliveries and better customer service.
  • Adaptability to business cycle: With the help of a commercial vehicle loan, you can increase the number of commercial vehicles for your business. This will help you adapt more easily to changes in the demand and business cycles.
  • Preservation of working capital: If your business requires a new vehicle then purchasing it with the help of commercial vehicle financing will help you preserve your working capital. With this loan you can avoid upfront payments, and use the capital for day-to-day operations, marketing or other business investments instead.

Step to Applying for Commercial Vehicle Financing

Applying for a commercial vehicle loan involves a series of simple steps that can differ from one lender to another. Here, is a general guide on how to apply for a business vehicle finance:

Step 1: Visit the online website of your preferred bank or financial institution and go to the ‘Commercial vehicle loan’ section.

Step 2: Click on the ‘Apply Now’ button.

Step 3: Fill the online application with accurate information.

Step 4: Submit all the required documentation and submit the form.

Step 5: Once your application is approved, you will receive the loan.

Ready to take the next step? Apply for a personal loan now!

Frequently Asked Questions

A commercial vehicle loan is a loan that can be used by individuals or businesses to purchase new or used vehicles for commercial and business use.

All vehicles that can be used for commercial purposes such as buses, trucks, tankers, autorickshaws, tippers, small commercial vehicles, electric vehicles, hybrid commercial vehicles, CNG vehicles, ambulances and caravan vehicles qualify for the loan.

Commercial vehicle loans empower businesses to expand operations, improve logistics, and boost competitiveness by acquiring essential vehicles with financial flexibility.

Yes, you can get commercial vehicle loans for the purchase of both new and used vehicles.

The typical repayment tenure for commercial loan vehicles ranges from 12 to 84 months.

Yes, commercial vehicle loans can be refinanced to secure better loan terms.

Businesses can ensure responsible use of the funds by budgeting effectively, maintaining vehicles efficiently and prioritising loan repayments.

The different types of commercial vehicle loans are new commercial vehicle loans, used commercial vehicle loans and commercial vehicle refinancing loans.

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