Buying a commercial vehicle is a huge investment, whether you’re an independent contractor, a driver, or the owner of a company. Taking out a commercial vehicle loan can make all of this possible for you. However, some common mistakes can either delay approval or cause payments to exceed your budget, resulting in overruns. If you can avoid these mistakes, you can lock in the right loan and get the vehicle you want without any stress.
Not Researching Lenders
Many a time, applicants skip researching and comparing lenders before getting a loan. Each lender is unique and has different features, interest rates, eligibility, and benefits. Mahindra Finance offers flexible commercial vehicle loan schemes, particularly for rural and semi-urban customers. Don’t commit to any one lender unless you’ve compared a few of the reputable ones.
Neglecting Your Credit Score
Your credit score is an important element that affects your loan approval and interest rate. A sub-par score will lead to the rejection of your loan application or higher EMIs (monthly installments in banks). Please review your credit report and try to clear all of your dues before you apply for a commercial vehicle loan. Even if you’re a first-time borrower, like many people, Mahindra Finance also evaluates some other credit parameters, which can help.
Underestimating Loan Tenure Impact
Many people decide on a longer repayment period because it reduces the EMI amount that you have to pay per month, and to some extent, they are right as the loan period and cost will benefit you. However, you’ll have to pay more total interest in the long run with a longer tenure, so you can never have it all. Always try to strike a balance between affordability and total cost while choosing a tenure.
Not Preparing Your Documentation
Missing or incorrect documentation will slow down your loan processing. Having all the documentation ready beforehand makes the process smoother. Here are the documents that you need to have:
- Proof of your identity and your address
- Business registration, if required
- Bank Statements
- Vehicle invoice or quotation
Mahindra Finance offers simple documentation processes for both small business owners and self-employed individuals.
Ignoring Hidden Costs
Processing fees, prepayment penalties, and insurance costs can add up quickly, so make sure you read the fine print in the loan agreement. A good lender, like Mahindra Finance, gives you transparency and will have a complete list of charges, so that there are no surprises later on.
Conclusion
Acquiring a commercial vehicle loan doesn’t have to be a complicated process. By having your documentation prepared, checking your credit rating, choosing the right tenure, and comparing lenders, you should be in a better position to obtain a loan that suits your needs. With partners like Mahindra Finance, you can get your dream vehicle in a more efficient, secure, and safer way with less stress.
