How to Finance a Used Truck


Vehicle finance takes different approach for personal and commercial vehicles. When you go for financing a Eicher used vehicle, the case even becomes more specific. The lender will first of all ask whether you are purchasing the truck for personal use or commercial use. There are certain other aspects as well. Let us have a glance at the aspects to be considered when financing a used truck.

Commercial vehicle financing

If the truck you are purchasing is supposed to be used for commercial purposes, the lender will seek certain information to verify if you are eligible for the loan. This information can be the total assets and equity of your business, your cash reserve, number of years you are in this business, risk factors if any, etc.



Age of the truck

The age of the vehicle can become a prime consideration for your lender. Older vehicles are less likely to fetch finance through traditional lenders.



Condition of the truck

When buying a used truck, the finance company gives much consideration to the condition of the truck. For this, they will send their appraiser to calculate the value of the truck and accordingly the maximum amount of loan to be given is decided. The better the condition of the used truck, more is the loan amount granted.



Cash assets

The cash asset of your business plays a major role in defining the terms and conditions of your loan. It is also a prime deciding factor of the down payment amount.



Credit rating & credit history

Get your credit rating handy while applying for used truck finance. If you have a good credit rating and perfect credit history, you can negotiate on the interest rates and EMI amount to your advantage.



Loan capacity

Before applying for a truck loan, you must calculate the capacity you can afford as the loan. As a rule of thumb, the monthly EMI value of your truck loan should not exceed 20% of your total income. Try to avoid borrowing too much.



Lending options

It is vital to conduct a comparative analysis of various lending options for the used truck. Carefully decide, whether you are comfortable with direct lending or dealer financing. For this you must check with all the prospective local banks, national banks, credit unions, online lenders and financing from second hand commercial vehicle dealers.



Vehicle insurance

For new trucks, usually it is mandatory to go for full coverage insurance until the loan is active. In case of buying a used truck, this decision can be left to the lender's discretion.



Always consider these points while purchasing a used truck. It is not only about how to obtain the loan, but also about how to go easily with the loan repayment.

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