October 17, 2018

What is a Business Car Loan?

A business car loan is designed to provide funds for individuals who use their vehicles for work or business. One great thing about this type of loan is that it comes with a lower interest rate than a personal car loan.

Here are some of the things that you need to know about business car loans:

Eligibility

A business car loan is not for every driver, so how can you be eligible for it? You must meet these requirements:

  • Do you use your car for work? As the name suggests, a business car loan is for you if you use your vehicle fully or partially for commercial purposes.
  • Talk to your employer. If your car is not used for your own business, you can talk to your employer who can provide enough documentation for you to get a loan. It’s essential to compare car loans from several lenders, and check their car loan rates to ensure that you’re getting the best deal.
  • The standard requirements of your lender. These will vary depending on your chosen lender. If you meet the requirements, you may be eligible for a business car loan, whether it’s a novated lease, finance lease or chattel mortgage.

If you’re curious about what your repayments would be, you can use a car loan repayment calculator. This online tool can give you an estimate based on the price of your chosen vehicle as well as the loan rate and term. Bear in mind, however, that it is used only as a reference. The actual figures will be determined once you apply for the loan.

Application

There are different types of business car loans, but generally speaking, you may want to consider these guidelines when applying for a car loan:

  • Look for a car loan online. Many of the best deals are offered by online lenders.
  • Have the the necessary documents available when you apply. Just like in any type of loan, there are several documents that you need to prepare when applying for a business car loan. If you’re employed, you may need to ask your employer to provide documentation about your employment.

The approval may take some time, depending on factors such as your current financial capacity and credit score.

Do you have other idea on how to compare car loans? Share your insights in the comments section.

About the author  ⁄ Marxa Dillan

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