For many small business owners and drivers, a three-wheeler (auto-rickshaw or commercial vehicle) is more than just a mode of transport—it’s a source of livelihood. However, purchasing a new or used three-wheeler often requires financial support. This is where a three-wheeler loan becomes a practical solution.
But with multiple lenders and loan products available, how do you choose the right one? Let’s explore the key factors you should consider before applying.
1. Compare Interest Rates and EMI Options
Different banks and NBFCs offer varying interest rates for three-wheeler loans.
Even a small difference in rates can impact your monthly EMI and total repayment.
Use an EMI calculator to understand repayment affordability.
2. Check Loan Tenure and Flexibility
Shorter tenures = higher EMIs but lower overall interest.
Longer tenures = smaller EMIs but higher total interest.
Choose a repayment period that balances both.
3. Understand the Loan-to-Value (LTV) Ratio
Many lenders finance up to 85–90% of the vehicle cost.
The higher the LTV, the lesser you pay upfront.
Ensure you can arrange the down payment comfortably.
4. Verify Eligibility and Documentation
Common eligibility factors:
Age (usually 21–60 years)
Stable income or proof of earnings
Valid driving license and permit (for commercial use)
Required documents: ID proof, address proof, income proof, and vehicle details.
5. Compare Processing Fees and Charges
Don’t just look at interest rates—check for hidden charges such as:
Processing fees
Prepayment or foreclosure charges
Late payment penalties
6. Look for Special Schemes for Drivers and Entrepreneurs
Some banks and NBFCs provide tailored loans for commercial drivers and small business owners.
Benefits may include low EMIs, seasonal repayment options, or bundled insurance.
7. Evaluate Lender’s Reputation and Customer Support
Choose a lender with a good track record in handling vehicle loans.
Reliable customer service ensures smoother loan management and quicker resolution of issues.
Conclusion
Choosing the right loan for a three-wheeler is not just about getting funds—it’s about finding a loan that suits your financial situation and business goals. By comparing interest rates, loan terms, fees, and lender credibility, you can make an informed choice and drive your business forward with confidence.
FAQs
Q1. What is the typical interest rate for a three-wheeler loan in India?
Rates generally range between 10%–16% per annum, depending on the lender and borrower profile.
Q2. Can I get a loan for a used three-wheeler?
Yes, many lenders offer financing for both new and used three-wheelers, though interest rates may be slightly higher for used vehicles.
Q3. Do I need a guarantor for a three-wheeler loan?
Not always. It depends on the lender’s policy, your income stability, and credit history.
Q4. How much loan amount can I get for a three-wheeler?
You can typically finance up to 85–90% of the vehicle’s on-road price.
Q5. Can I prepay or foreclose a three-wheeler loan?
Yes, but check if your lender has prepayment or foreclosure charges before deciding.
Published on : 1st October
Published by : SMITA
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