If you have a small business and are looking for a small business finance for a truck, getting a truck loan is your best option. Before applying, there are a few things you should know. These factors include credit score requirements, down payment, and interest rate. These factors will help you choose the right truck loan for your needs.
When you are applying for a truck loan, you may have to put down a down payment. You can use cash, a trade-in or even your trade-in value to cover the down payment. The bigger the down payment, the lower your monthly payment and the overall cost of financing the truck. You should check your credit report in advance to find out if you have bad credit. In that case, you should apply for a small business loan with bad credit.
A higher down payment will also reduce the size of the loan. This will lower the overall interest paid and make the loan term shorter. This will also keep your monthly payments low. And since you are financing a larger amount of the vehicle, a larger down payment will mean lower monthly payments over the loan’s life.
The interest rate on a truck loan varies widely, depending on the type and age of the truck. Depending on the credit history of the borrower, interest rates can range from 5% to 30% annually. A large down payment may raise the interest rate for those with bad or low credit. If the loan is for a commercial truck, you may need to put down as much as 15%.
It is important to know the exact amount of your down payment before shopping for a truck. Depending on the type of truck you want, it could cost $100,000 or more. A down payment of 20% is typical for a truck loan, but some finance companies offer loans with no money down. When shopping for a truck loan, take note of the minimum down payment and credit score. This will help you negotiate a better interest rate.
Length of Loan Term
When choosing a truck loan term, the length of the loan depends on the type of truck and its down payment. A long term business loan generally has lower monthly payments but comes with higher interest costs. On average, a new truck loan lasts 60 months (5 years), though the term can be extended or decreased based on the down payment. Finance companies may not approve longer terms for used trucks because they have less collateral value.
Credit Score Requirements
A truck loan is similar to any other loan, but there are some specific credit score requirements for truck loans. For the best chance of approval, your credit score should be at least 700.
Other requirements could be proof of insurance and CDL license(commercial driver’s license), proof of a USDOT number (U.S. Department of Transportation number) or Motor Carrier Number. If you are looking for funding for a small business startup, at US Capital we have quick business loans. We are always ready to help you and bring you excellent service with our exceptional well-trained and highly-effective advisors. Contact us today!