One can avail of a commercial vehicle loan for a variety of commercial vehicles, which can be used at different places to serve various purposes. Based on the type of vehicles these loans are sought for, commercial vehicle loans can be of four types:

- New commercial vehicle loan

This type of commercial vehicle loan is provided to customers for the purchase of brand new commercial vehicles for business purposes. Banks/NBFCs offer up to 100% funding on the chassis or base frame value of the vehicle. Some of the banks provide additional funding for the body construction of the vehicles in selective cases based on the borrower’s profile.

- Old commercial vehicle loan

Old or used commercial vehicle loans are those loans which are offered to purchase all makes of pre-owned or used commercial vehicles. Under this loan, borrowers can expect to get finance against old vehicles which are up to 15 years old. Most of the banks provide up to 90% funding on the used vehicle’s value or depreciation grid value.

- Commercial vehicle refinancing

Under commercial vehicle refinancing, lenders (banks or NBFCs) either offer loan on an existing vehicle which is free of loan or take over an existing commercial vehicle loan and provide additional finance for it, based on an individual’s eligibility. While some borrowers can reduce the monthly EMIs of their existing loan and free up some cash by refinancing an existing loan at lower interest rates, few others can get direct finance on their free vehicles to meet the working capital needs.