Question 1

What is Chattel Mortgage truck financing?

Accepted Answer

Chattel Mortgage is a commercial credit facility which businesses can use to finance purchases of a range of assets including heavy vehicles. It is sometimes referred to by lenders as Truck Loan or Heavy Equipment Loan. It is secured format credit with the asset used as the collateral. The borrower has ownership at settlement with the lender holding a claim over the asset until all payments are made.

Question 2

Will my Chattel Mortgage payments be a tax deduction?

Accepted Answer

The interest charges included in monthly repayments is deducted. The capital repayment portion is not. With Chattel Mortgage, the asset is depreciated in accordance with ATO schedules to deliver a deduction.

Question 3

What is depreciation?

Accepted Answer

Depreciation is writing off the value of an asset over time. The ATO sets schedules for asset depreciation by businesses. A certain percentage of the value of the vehicle is depreciated each year over multiple years until the full value is exhausted. The depreciation amount is deducted from income as a tax benefit.

Question 4

I’m setting up a new business, can I apply for Chattel Mortgage vehicle financing?

Accepted Answer

All types of business entities may apply for all forms of commercial credit. Approval is subject to individual lenders. Where a new business does not have full financials they may need to source a broker to obtain low doc financing.

Question 5

Is a Chattel Mortgage heavy vehicle loan suitable for used vehicles?

Accepted Answer

Used heavy vehicles may be financed with Chattel Mortgage where considered acceptable collateral by lenders.

Question 6

Does the vehicle fuel system affect the financing?

Accepted Answer

The type of fuel system on a heavy vehicle – diesel, electric, hydrogen, hybrid, should not affect interest rates and terms offered on financing.

Question 7

What is the financing term with Chattel Mortgage?

Accepted Answer

Terms for asset financing are subject to lender decisions. Fixed terms up to 84 months are typically offered.

Question 8

Can I get a no deposit Chattel Mortgage?

Accepted Answer

The full vehicle purchase price may be approved for inclusion in a commercial loan, subject to the lender’s assessment of the applicant and the vehicle value compared with the loan amount.

Question 9

Will my Chattel Mortgage truck loan interest rate change at any stage?

Accepted Answer

Chattel Mortgage truck finance interest rates are typically offered at a fixed rate which does not change.

Question 10

What happens if I sell the vehicle before the end of the Chattel Mortgage loan term?

Accepted Answer

Where a vehicle under finance is sold prior to the end of the term, borrowers typically pay out the monies owed to the lender from the proceeds of the sale. Early payout fees may apply.

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