InvestorQ : Who can avail of a loan?
Anjali Desai made post

Who can avail of a loan?

Anusha Savla answered.
3 years ago

Loans can be applied by individuals and by co-applicants, partners in partnership firms and directors in private limited companies can apply for a join loan. In case of individuals blood relatives can avail of a joint loan.

The minimum loan amount which can be availed by for small players is Rs. 1 lakh, while the same for large corporate is up to Rs. 5 crore.

Approval process

The loan is generally approved within seven days of submission of required documents to the bank. However, the time taken to sanction the loan may vary depending upon the nature of the loan, quantum of funding and location. Normally, the bank / financial institution disburses the loan directly to the vehicle dealer and not to the borrower.

Loan amount & tenure

To understand the loan amount that can be availed, we need to first understand the concept of a ‘chassis’. A chassis is the internal structure of a vehicle like engine, transmission, driveshaft, differential and suspension. In other words, it is the base frame of a car.

The loan amount can vary depending upon the specific requirement. Funding can extent to 100% of the chassis, body funding can be extended on special requirement and on the past experiences.

The tenure of the loan can range from 6-60 months.

Interest rates

Commercial vehicle interest rates range from 10% to 15% depending on the customer and vehicle segment. The customer segment comprises self employed, corporate, businessmen and partnership firms, while vehicle segment includes various vehicles such as trucks, buses, cars, etc.

The rate depends on a lot of factors such as the number of vehicles owned by the borrower, his business turnover, repayment track record from other financiers (if any), etc. The financial institutions are able to confirm the rate of interest once they have studied the documents. The interest rate may be fixed or variable.