The Indian Automobile industry is among the fastest-growing industries, which is attracting investors. But buying a truck might be out of budget for small businesses. Therefore, there comes a solution called ‘Truck Loan’. However, wondering about the procedure. Taking a truck on loan in India involves several steps and requires careful planning and documentation.
Here's a detailed procedure to follow when applying for a truck loan in India:
Research and Comparison
Research various banks, financial institutions, and non-banking financial companies (NBFCs) offering truck loans. Compare their interest rates, processing fees, etc., to find a suitable loan option.
Eligibility Check
Common eligibility factors include age, income, credit score, business stability & repayment capacity.
Down Payment
Most truck loans require a certain percentage of the truck's cost to be paid as a down payment. Thereafter, the lender will finance the remaining amount.
Documentation
Collect all the documents the lender requires, including identity, address, income proof, and business registration documents.
Loan Application
Visit the chosen lender's branch or apply online through their website. Then, fill out the application form and submit it.
Verification and Processing
The lender will review your application and documents and conduct a credit check to assess your creditworthiness.
Loan Approval
If your application meets the lender's approved criteria, they will offer you a loan.
Agreement and Documentation
Once the loan is approved, the lender will provide a loan agreement detailing the terms and conditions.
Repayment
Start repaying the loan through Equated Monthly Installments (EMIs) per the agreed schedule. The first EMI is typically due within 30 days of loan disbursement. You can also use Truck EMI Calculator to understand EMI distribution.
Ownership Transfer
When the loan has been paid off in full, the lender will provide you with a No Objection Certificate (NOC) and other paperwork you need to formally transfer ownership of the truck into your name.
Conclusion
It's important to ask the chosen lender about their unique processes and criteria because each lender may have different ones. Also, carefully consider the loan tenure, processing fees, interest rate, and other charges before finalizing the loan, ensuring it aligns with your financial capabilities and requirements.
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