Vehicle Finance (Commercial)

get loan under vehicle finance for commercial use
Vehicle Finance (Commercial)

Learn more about our Vehicle Finance Option for Commercial Use Vehicles. This scheme is for financing vehicles which are meant for commercial purposes and for financing of working capital requirements of Transport Operators with loan duration upto 5 years.

Purpose
A. To Purchase:
  • Cars, Mini / Light / Medium Vehicles, Autos / Jeeps / Lorry / Bus and other commercial vehicles, etc. to be operated on commercial basis.
  • Heavy Vehicles registered with RTO such as Crane, Bulldozer, Earth Movers, Forklifts, Mounted vehicles, etc.
  • Cranes, Road Pavers, Rigs which are not registered with RTO.
  • Except cars, mini vehicles and Autos finance may be extended for purchase of second hand vehicles also. In case of finance for second hand vehicles Engineer's Valuation Certificate confirming the price and residual life of the vehicle has to be obtained. The residual life of the vehicle should not be less than 1.5 times of the repayment period of the loan.
    B. To meet the working capital requirements of Transport Operators such as wages, salaries, fuel expenses, maintenance expenses, payment of road tax, for vehicles by Transport Operators.
Eligibility
Individuals, Proprietary Concerns, Partnership firms, Limited Liability Partnerships, Registered Corporates, and Trusts etc.
Form of Advance & Repayment
Purchase of Vehicles: - Demand Loan / Term Loan
Repayable within a maximum period of 5 years. The installment holiday may be fixed depending upon delay in delivery of vehicle but not more than 3 months.
Working Capital:
WCDL - Repayable in 36 months (to be reviewed every year in monthly/ quarterly installments).
OD - Running account renewable on or before the end of one year
OD - Reducing balance method repayable within 36 months (to be reviewed every year.
Quantum of Loan
For purchase of Vehicle:
Maximum of Rs. 250 Lakhs
For Working capital of Transport Operators:
Upto 60% of the valuation of un-encumbered / HP free vehicles in the name of the borrower / proprietor, subject to a Maximum Rs. 50 Lakhs.
Margin
Margin:
1. a. 15% of the on road price of the vehicle for new vehicles (including body building cost, if the body building is done by the manufacturer), b. 25% if the body building is not done by the manufacturer and carried out by outsourced units.
2. 40% - in the case of second hand vehicle
3. Working Capital: Margin - 40% of assessed value of Debt Free vehicles with residual life of not less than 5 years.
Note:On road price of vehicle includes cost of chassis, all accessories including air suspension, audio/video systems, air-condition system, seats, etc., body building cost, Registration charges, insurance, road tax and AMC.
Rate of Interest (Floating)
1. Term Loans for purchase of new vehicles: (irrespective of collateral coverage & rating).
  • For loans up to Rs. 20 Lakhs - BR + 2.25% (12.55% p.a.).
  • For loans above Rs. 20 Lakhs - BR + 2.00% (12.30% p.a.).
2. Term Loan for purchase of Second Hand Vehicles.
  • Irrespective of Amount - BR + 3.75% (14.05% p.a.).
  • Note: In case of loans sanctioned under tie-up arrangements a concession of 0.25% may be permitted by the respective sanctioning authority.
3. Working Capital for Transport Operators:
  • For credit limits below Rs. 20 Lakhs - BR + 3.75% (14.05% p.a.).
  • For credit limits above Rs. 20 Lakhs Prime & AAA Rating - BR + 3.25% (13.55% p.a.), AA & A Rating - BR + 3.75% (14.05% p.a.), Rated below A or when rating is not reviewed - BR + 4.00% (14.30% p.a.).
  • Current Base Rate for Lending (BR) is 10.30% p.a.
Security
For Term Loan: - Primary - Hypothecation of vehicle to be financed
Collateral / Guarantee:
a. For credit limits covered under CGS of CGTMSE - Nil, b. Credit limits not eligible for cover under CGS of CGTMSE i. Collateral Security or third party guarantee in case of cars, mini vehicles & autos, ii. For Trucks/ New Vehicles other than items mentioned in (i) Tangible and marketable collateral security to cover at least 50% of the loan amount (or) credit worthy guarantee, iii. Second Hand Vehicles: Tangible and marketable collateral security to cover at least 50% of loan amount.
For Working Capital: - Hypothecation of unencumbered / HP free vehicles having residual life of not lesser than 5 years with 40% Margin.
Insurance
The vehicle(s) secured for the bank's loan(s) should be insured for full value in case of new vehicles or for the value as assessed by the valuer in case of second hand vehicles with bank clause in the bank's favour.
Penal Interest
Any irregularity or default in repayment will attract penal interest of 2.00% p.a. over and above the above the applicable rate of interest.
Processing Charges
1.00% of the loan amount plus taxes as applicable.
Prepayment charges
At the rate of 2.00% of term loan amount prepaid plus taxes as applicable. Loans closed by way of take-over by other Banks alone will attract prepayment Charges. No pre-payment charges will be levied in case the loan(s) is/are closed by the borrower from own sources of funds and loans sanctioned to individuals.
Credit Guarantee Annual fee
The annual guarantee fee payable for the loans covered under CGS of CGTMSE should be borne by the borrower including applicable service tax, if any. The same may be as advised by CGTMSE from time to time.

All the above Terms and Conditions are subject to change and sanctioning of the loans is at the sole discretion of the Bank. Service Tax on All Service Charges extra wherever applicable.