The cheapest truck loan may be obtained with a lower interest rate, lower payments, better terms and conditions, and may depend on the business and vehicle. The definition of ‘cheapest’ may be different for different operators. Some may be focussing on the interest rate, others on the monthly repayment, and some on the total overall investment outlay when interest and other charges are applied.
Depending on the business’ objective, there may be actions that the operator can take to achieve a more affordable finance outcome. These may include addressing the financials and credit profile of the business, the price of the vehicle being purchased, and using a broker to source their financing.
To assist operators to establish their benchmark for affordability and their individual targets for finance affordability, we provide this explainer. Detailing how the elements of the loan affect affordability and how we may assist operators to obtain their cheapest truck loan.
Cheapest Truck Loan Interest Rates
Achieving the lowest interest rate is integral to both the monthly finance payment and the total finance cost. Rates vary with different lenders, with different asset finance products and for different business profiles. The amount borrowed can also affect the rate offered. The rate advertised by a lender for asset finance, may not be the rate all businesses are offered. It will be the rate typically for new vehicles and for businesses that have good financials and credit history. Used vehicles can attract a higher rate than a new vehicle.
Lenders will make changes to their rates often in line with Reserve Bank cash rate decisions and based on their own analysts’ forecasts for the economy and their risk assessment of different industry sectors. Having access to a large lender base, including specialists in heavy vehicle lending, through Jade, may assist operators connect to the lender that suits their requirements and is currently offering the best market rates.
Asset Finance Facilities Variations
Rates are different with asset finance facilities. Chattel Mortgage and CHP offer the lowest rate, Lease is slightly higher, and Rent-to-Own the highest. While simply opting for the credit product with lowest rate may appear straightforward, it’s not that simple.
Businesses need to use the credit facility that suits their accounting method, tax and balance sheet preferences, and their overall objectives. All do offer tax deductions which can be seen as reducing the overall cost of the financing.
Importance of Financials and Credit Profile
Interest rates essentially represent the risk factor for lenders. The risk of lending to a business on a certain asset. The stronger the financials and credit history of the business, the greater the opportunity for the best rates.
Maintaining a good payment history can be essential. Paying down other debts prior to applying for new finance may contribute to a better rate.
The size of the loan may also present a higher risk to lenders, depending on the financials and credit profile of the operator. Requiring a smaller loan with a lower-priced vehicle may offer a solution for those seeking to lower their finance commitments.
Businesses that do not have all the financials requested by the lender, for example new and some small operators, may struggle to be offered the best rates and cheapest finance deals. Using our services, these operators can connect with our lenders offering Low Doc Finance. Affordable rates and payments can be achieved.
Lowering Repayments for Cheapest Truck Loan
For operators focussing on what their finance is costing each month as a gauge to ‘cheap’, there are ways to lower the monthly payment. The total amount borrowed obviously affects the payments. But the term and any balloon also have a direct impact on that monthly commitment.
A longer term will deliver a lower monthly payment, but more interest may accrue over that longer term. That can increase the total cost of the loan. The same effect is seen with the balloon. A larger balloon will reduce the monthly payment but may mean more interest and a larger payout due.
Using our Finance Calculator, you can easily see how the term, balloon and rate change the monthly payment and interest accrued.
How We Help Operators Get their Cheapest Truck Loan
We assist operators to secure their cheapest truck finance, whether that is obtaining their best possible rate or their most workable payments. We have access to more lenders and can quickly find the most suitable lender offering the lowest market rates. Compare our current rates as a guide to the possibilities.
Our experts individually negotiate each loan to best meet targets for affordability with terms and conditions. All deals are handled by one of our experts to ensure your preferences and objectives are addressed.
To ensure you obtain your cheapest truck loan contact Jade Truck Loans on 1300 000 003 for the best rates and individually sourced finance solutions.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.
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