Are you wondering about the documents required for commercial vehicle loan applications?
With the trucking industry valued at $800 billion in the US, you might want to hop on board! To kickstart your new venture, you may need to take out a commercial vehicle loan. You’ll need to gather and submit certain documents for your loan to be approved.
In this article, we’ll look at the documents required for a commercial vehicle loan and what you can expect when applying for your commercial vehicle loan. Your commercial vehicles are right around the corner!
Documents Required For A Commercial Vehicle Loan
Most documents required for commercial vehicle loans are fairly standard. However, there are extra documents you’ll need to provide that are specific to a commercial loan. The following list includes documents required for a commercial vehicle loan. Each lender has different requirements, so it’s essential to consult them.
Let’s take a look. Your vehicle finance journey starts here!
- Personal identity: Your identity document is a requirement by law. You can use your driver’s license, passport, or another government-issued identity document. Your document needs to show your photograph and your name.
- Proof of residence: This is to verify and prove your residency address. It’s also used for security purposes to prevent fraud. You can include your rental agreement or your utility bill as proof.
- Commercial driver’s license: To finance commercial vehicles, you might need to provide your CDL. This proves that you (or your partner) can drive the vehicle.
Income And Business Details
Proof of income and employment: Your lender will want to see that you can repay your loan. You might need to provide your payslips for three months, six-month bank statements, and an employment contract to prove your income.
- Proof of business ownership or a business plan: Showing business ownership or a business plan when starting your own trucking business will indicate how the vehicle will benefit you.
- Down payment: Providing proof of your down payment to your lender is crucial. Some lenders have a minimum amount that you’ll need to provide. How much you put down also determines your repayments.
- ITR proof: You may need to provide an updated ITR document alongside the documents required for commercial vehicle loans.
- Loan repayment track: If you have any existing loans, it is a good idea to provide evidence of your repayments.
- Application form: Each lender has its own loan application form to fill out. Find out from them which document applies to your commercial truck loan application. You’ll probably need to provide two passport-size photographs with your application to finance commercial vehicles.
- Proof of experience: If you’re a first-time buyer, you’ll need to provide evidence of your experience with commercial vehicles.
- Vehicle details: If applicable, and you have a vehicle you’d like to buy, providing valuation documents and vehicle details is important.
- Vehicle insurance: If you have an existing fleet, you can provide details of your insurance to cover accidents and repairs.
Do You Need A Lawyer To Review The Documents?
While having a lawyer review the documents required for a commercial vehicle loan is not always necessary, it can be helpful.
A lawyer can help you to ensure that all the documents are prepared correctly and meet all the legal requirements. They can also help ensure that the loan is structured in a way that will benefit you. It will be helpful to have a lawyer review documents required for a commercial vehicle loan if the loan is complex.
However, as much as having a lawyer can be beneficial to your loan application, it’s an extra expense on top of the loan. So, there’s a tradeoff. Make sure you vet the lender you choose to go to, to ensure they are trustworthy. A company like Mision Financial Services wants the best outcome for both parties and will work to ensure you understand the entire loan process.
Commercial Truck Financing
Commercial truck financing will allow you to purchase trucks for business purposes. These vehicles include semi-trucks, box trucks, and flatbed trucks.
It’s a great option if you’re looking to buy your first vehicle, or add to your fleet. A loan term typically ranges from 24 to 72 months. The interest rates you’re offered will depend on your creditworthiness, the value of the truck, and your lender’s policies.
If you’re looking for commercial truck financing, keep reading to determine if you’re eligible for a loan.
Requirements For A Commercial Truck Loan
To qualify for a commercial vehicle loan, you’ll need to meet specific criteria set out by your lender. Each lender will indicate the documents required for commercial vehicle finance. Typically, lenders consider the following:
- Creditworthiness: Lenders will check your credit score. A good credit history can improve your chances of getting a loan. Many companies are willing to help those with subpar credit scores.
- Financial income: Your business or individual finances need to be in check. Lenders want to see if you’ll be able to repay the loan.
- Experience: The more experience you have in driving a commercial vehicle, the better your chances are. If you own a business – the longer it’s been around, the better!
- Permanent residence: You’ll need to show permanent residence status in your country of application.
- Down payment: Every company has a different percentage required for a down payment for your vehicle loan. What you can provide determines your eligibility. Your credit rating may also affect this.
Understanding loan eligibility requirements with your lender is crucial. The company you choose may require additional information and documentation.
How To Qualify For A Loan
We’ve discussed all of the important information you need to know about requirements. So, how do you qualify for a loan?
Depending on your credit score, it may take longer to qualify. Below are some factors that you’ll need to take into consideration.
- Credit score: Try to increase your credit score by paying accounts on time and not missing payments. Luckily, some companies can assist you even if your credit score is low.
- Business plan: This step is similar to a business loan! If you’re starting your own company, have an effective business plan to help you secure your first commercial truck loan.
- Income: If your income doesn’t meet your specific loan requirement criteria, you’ll need to increase it to be able to afford loan repayments. You’ll need to show a stable income through six months of bank statements.
- Experience: If you’re relatively new to the trucking scene, you may need more experience before getting approved for a loan. If this is the case, gaining more experience as a commercial vehicle driver will help.
- Down payment: Every company has its requirements for a down payment. Having the necessary funds is crucial to getting your loan approved.
Ultimately, you will have to ensure that you meet all the requirements above to qualify for your commercial truck loan. Some cases require extra time, effort, and savings before you can be approved.
How To Apply For A Loan
The application process may differ from company to company. The circumstances surrounding the loan may also impact the time to approval. For example, if the lender requires additional information to process your loan application.
In a nutshell, the application process can be simplified as follows:
- Choose your lender: Research what each option offers. Choosing a lender specializing in commercial vehicle financing is crucial. These companies are usually more flexible in their terms and will understand your business needs better.
- Gather your documents: Once you’ve found your ideal lender, it’s time to gather all the documentation required for the application process.
- Complete the application form: When you’ve gathered all your documents, you can fill out and hand in the application form.
- Wait for approval: Your lender will review your application and the supporting documents and decide whether to approve the loan. They may also ask for any additional information.
- Sign the loan contract: Once approved, your lender will provide you with a loan agreement to review and sign. This document will detail the terms of the loan, including the interest rate, the loan amount, and the schedule for monthly repayments.
- Provide collateral (if required): Some lenders may require collateral, such as a lien on the vehicle, or a personal guarantee, to secure the loan.
- Receive the loan: Once all the paperwork is complete, the loan will be granted, and you’ll receive the money to purchase your commercial vehicle!
When applying for a commercial vehicle loan, it’s crucial to get as much information as possible from the lender regarding requirements and eligibility. The more you can find out and get done, the smoother the loan application will go.
Commercial truck financing is a top choice for those buying their first vehicle or adding to their existing fleet. Ensure that you understand the documents required for commercial vehicle loans. These may be specific to each lender, so do your research!
Gathering these documents will ensure a smooth and quick application process. If you prepare in advance, you’ll be in your new vehicle in no time!