USED TRUCK FINANCE: YOUR GO TO GUIDE
When purchasing any vehicle, one of the most important decisions is whether to buy a new vehicle or a used one. However, the case becomes even more particular if you’re looking for financing a used truck as it requires thorough research and you need to make a choice between personal and commercial vehicle loans.
Reviewing of your business’ assets and equity
If you’re buying a truck for commercial purposes, your lender will first review the assets and equity of your business. Your lender will focus on certain parameters before agreeing upon the terms and conditions. Unfortunately, newly introduced businesses may have a harder time securing financing.
Lifespan of your vehicle
The age of the vehicle is of the utmost importance for your lender because older trucks will be hard to finance. Furthermore, your business’ cash assets play a major role in determining the terms and conditions of the loan and also influence the amount of down payment. Depending on the lifespan of your business and its cash assets, the down payment on the commercial truck can range anywhere between 0% and 15%.
Credit score and credit history
Lenders use credit score and credit history to determine if an applicant can apply for funding and also to craft the terms and conditions. Get your credit rating ready while applying for used truck finance. If you have a good credit rating and credit score, you have an advantage to negotiate on the interest rates and amount of EMI.
What can you afford?
When financing any vehicle, one important point that should come to your mind is, what can you afford? As a general rule of thumb, the monthly EMI should not exceed 20% of your monthly income. The average term for truck loan is 5 years. Therefore, you should be sure that your source of income is secure for the next 5 years. Normally, used vehicles are funded for 10 years of life. Ex – 4 years old used trucks will be funded for maximum 6 years.
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