Check your eligibility
What These Loans Fund
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Loan against the assessed value of...
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Funding typically 60 to 75 per cen...
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Multiple vehicles under a single f...
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Any lawful business end use
Who Can Consider This Loan?
- Indian resident, generally aged 21 to 65 at loan maturity
- Salaried applicants: stable employment, commonly at least one year of total experience
- Self-employed applicants: business vintage, typically two to three years, with filed returns
- Minimum income threshold that varies by lender, city and vehicle segment
- Credit score materially affects both approval and the rate offered
- Existing EMIs are counted — total obligations usually cannot exceed 50 to 55% of income
What May Not Be Funded?
- Vehicles with an existing charge not yet cleared
- Vehicles beyond the lender's age criteria
- Amounts above the funding percentage of assessed value
- Processing and valuation charges
- Vehicles not in active, documented use
Always check the sanction letter before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading loans companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced loans professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
Commercial vehicle refinancing raises a loan against trucks or buses you already own outright. The vehicles continue operating and earning; the lender takes a hypothecation charge and advances a percentage of assessed value.
For transport operators it is a practical working capital tool. Freight receivables run long, fuel and wages are immediate, and a fleet sitting unencumbered on the balance sheet is capital that is not working. Refinancing converts part of it into cash without losing the earning asset.
It costs more than purchase finance, because there is no fresh transaction anchoring the value and because refinancing is often sought when cash flow is already tight. That is worth acknowledging honestly: the moment you most want this facility is the moment a lender prices it most carefully.
Who should consider it
Transport operators with unencumbered vehicles needing working capital. Operators bridging a receivables gap. Businesses funding expansion from existing fleet value rather than fresh equity.
Benefits
- Releases capital from vehicles without interrupting operations
- Cheaper than unsecured business borrowing
- Vehicles continue earning throughout the loan
- Multiple vehicles can be refinanced under one facility
- Funds available for working capital, expansion or consolidation
- Faster than most other secured business borrowing
What the loan funds, and what it does not
Read the right-hand column first. It is the one that decides how much you have to arrange yourself.
Usually funded
- Loan against the assessed value of owned vehicles
- Funding typically 60 to 75 per cent of assessed value
- Multiple vehicles under a single facility
- Any lawful business end use
Usually not funded
- Vehicles with an existing charge not yet cleared
- Vehicles beyond the lender's age criteria
- Amounts above the funding percentage of assessed value
- Processing and valuation charges
- Vehicles not in active, documented use
Funding limits and the treatment of add-ons vary between lenders and move with the borrower profile. The sanction letter you receive is what governs — we will walk you through it before you sign.
How it works with us
- 1 Check eligibility before anyone pulls your credit file We assess income, existing EMIs and profile against lender criteria first, so applications only go where they will actually qualify.
- 2 Compare on total cost, not headline rate Rate, processing fee, tenure and prepayment terms together. A lower rate with a heavy fee is often the costlier loan.
- 3 Documentation prepared once One set of documents, used across lenders, rather than assembling a fresh file for each application.
- 4 Sanction and disbursal The sanction letter states rate, tenure and charges. Funds go directly to the dealer or seller against the invoice.
- 5 Delivery, and the paperwork after it Hypothecation is noted on the RC. We flag the closure formalities so removing it later is not a scramble.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- Be clear about why you need it. Bridging a receivables gap is sound; funding a persistent operating loss with secured borrowing makes the eventual problem larger.
- Vehicle age caps the tenure and the funding percentage. An older fleet raises less and repays faster.
- Encumbering your fleet reduces what you can borrow against later. Keep some unencumbered capacity for a genuine emergency.
- Compare against invoice discounting or a working capital facility. If your receivables are from creditworthy counterparties, those can be cheaper.
- Keep the vehicles insured and maintained. A lender holding a charge on a poorly maintained fleet will act on it, and the loan agreement generally allows them to.
Documents required
- Identity proof — Aadhaar, PAN, passport or driving licence
- Address proof
- Salaried: last three months of salary slips and Form 16
- Self-employed: last two to three years of income tax returns with computation
- Bank statements for the last six months
- Proforma invoice or booking confirmation from the dealer
- Passport-size photographs
- Existing loan statements, where you are servicing other EMIs
Frequently Asked Questions
Can the vehicles keep operating?
Yes. The lender takes a hypothecation charge but the vehicles remain in your possession and continue running. Nothing about your operations changes apart from the charge on the registration certificates.
How much can I raise?
Typically sixty to seventy-five per cent of the lender's assessed value of the vehicles, with older vehicles attracting lower percentages and shorter tenures.
Why is the rate higher than purchase finance?
Because there is no fresh purchase transaction anchoring the value, the vehicles are older, and refinancing is frequently sought when cash flow is already tight. Lenders price all three.
Can I refinance several vehicles together?
Yes, and it is usually the better structure — one facility, one assessment, one repayment schedule, and generally better pricing than refinancing vehicles individually.
Is this better than a working capital loan?
It depends on what you have. If your receivables are from creditworthy counterparties, invoice discounting or a working capital line may be cheaper and leaves the fleet unencumbered. Compare both before committing the vehicles.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.