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What Is a Chattel Loan ?

A chattel mortgage is a loan agreement in which movable personal property, such as vehicles or equipment, is used as security for the loan. The borrower takes ownership of the chattel at the beginning of the loan term but the lender holds a mortgage over it until the loan is repaid. If the borrower defaults on the loan, the lender has the right to repossess the chattel to recover the outstanding debt.

Eligibility Criteria for a Chattel Loan

  • Business Usage:

    The financed asset must be used predominantly for business purposes.

  • Creditworthiness:

    The borrower's credit history and financial standing will be evaluated by the lender.

  • Legal Entity:

    The borrower is usually required to be a registered business entity.

Purpose of a Chattel Loan

Asset Acquisition

Enables businesses to acquire essential assets without large upfront payments.

Tax Deductions

Provides tax benefits through claiming deductions on interest and depreciation.

Flexible Terms

Offers flexible repayment terms tailored to the business's cash flow.

Documentation Required for a Chattel Loan

  • Personal identification such as driver’s license, passport, or other government-issued ID.
  • Business financial statements including profit and loss statements, balance sheets, and cash flow statements.
  • Information about the asset being financed, including its purchase invoice and registration details.
  • Proof of business registration or incorporation documents.
  • Evidence of insurance for the financed asset.

Advantages of Using a Chattel Loan

1

Ownership Retention

Businesses retain ownership of the asset throughout the mortgage term.

2

Capital Conservation

Preserves working capital for operational needs, ensuring financial flexibility.

3

Fixed Interest Rates

Offers the advantage of fixed interest rates for the loan duration.

Calculate Your Payments

Use our Payment Calculator to estimate your monthly mortgage payment. You can input a different home price, down payment, loan term and interest rate to see how your monthly payment changes.

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Live Market Pricing

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Loan Process

Welcome to our comprehensive guide to the loan process. Whether you’re a first-time homebuyer or experienced investor, understanding the steps involved in securing a loan is crucial. We’re here to simplify this journey for you.

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