Buying a commercial truck in India — complete guide (loan amount, lenders, paperwork, rates, fees, timelines, tips)

Buying a commercial truck is a big cash outflow for any small fleet owner or first-time buyer — most buyers in India finance at least part of the cost. Below is a practical, bank-backed guide that tells you how much loan you can get, who lends, what documents are needed, typical interest-rate ranges, processing time, what fees to expect, and how to speed up & negotiate the best deal.

1) How much loan can you get? (loan quantum / margin)

Most banks and NBFCs finance a very large share of the vehicle’s value — often up to 100% of the chassis value / on-road price for new commercial vehicles under specific schemes or offers. In practice lenders commonly ask for a borrower margin (down payment) of about 10–25% depending on the bank, type of vehicle (new/used), borrower profile and whether the vehicle is a light commercial vehicle (LCV) or heavy truck. For example, HDFC states they can offer up to 100% finance in some cases. HDFC Bank

What that means for you: if the on-road price is ₹20 lakh and the bank finances 85% you’ll get ₹17 lakh loan and must bring ₹3 lakh as margin + pay upfront taxes/insurance as applicable (or arrange dealer funding). If the bank offers 100% finance you may still need to pay insurance, registration, and some dealer fees upfront.

2) Which banks / financiers will give CV loans?

You have a wide choice — from large public sector banks to private banks and specialised NBFCs/vehicle financiers:

• Major banks: State Bank of India (SBI), HDFC Bank, ICICI Bank, Axis Bank, Kotak, IndusInd, Bank of Baroda. These cover new & used CVs, fleets, and offer competitive rates for credit-worthy borrowers. State Bank of India+1

• NBFCs / specialised transport financiers: Shriram Transport Finance, Mahindra Finance, HDB Financial Services, Tata Capital, IIFL, IDFC First — these often finance used trucks and provide flexible underwriting for operators with irregular cash flows. Shriram Finance+1

• Dealer tie-ups: many OEM dealers (Tata, Ashok Leyland, Eicher, etc.) have pre-approved finance offers through partner banks — good for quick disbursal and festive offers.

Tip: Public sector banks may give slightly lower headline rates for well-documented borrowers; NBFCs often accept weaker documentation but charge higher rates.

3) Typical interest-rate ranges (what to expect in 2025)

Interest rates vary widely by lender, borrower profile (salary or self-employed), vehicle age (new vs used), loan tenure, and whether the loan is linked to an external benchmark. Typical ranges observed in the market:

• Lowest quoted (for very good borrowers / new vehicles): ~7.5% p.a. onwards (SBI and other competitive offers have advertised rates around this level). State Bank of India

• Common bank ranges: ~7.8% – 16% p.a. depending on bank and product. HDFC and Axis publish ranges that fall into this band for CV loans. BankBazaar+1

• NBFCs / smaller finance players: can go up to 20–24% p.a. or higher for used vehicles, poor credit history, or very small operators. Kotak and some NBFC pages show higher ceiling rates. Kotak

Bottom line: expect 7.5%–12% for well-documented new-CV loans from major banks; 12%–24% for riskier profiles or used vehicles with NBFCs.

4) Tenure — how long can you borrow for?

• For commercial vehicles lenders commonly offer tenures from 12 months up to 60–84 months (5–7 years), depending on vehicle type and lender policy. SBI lists a maximum 84 months for commercial vehicle loans in some cases. Longer tenure lowers monthly EMI but increases total interest. State Bank of India

5) Documents you will need (typical checklist)

Documents vary slightly by lender, but the usual set:

For salaried applicants

• KYC: Aadhaar, PAN, Passport/Driving licence (ID & address).

• Latest 3–6 months salary slips, Form 16 or employer certificate.

• Bank statements (last 6 months).

• Signed loan application & photographs.

• Pro-forma invoice / tax invoice from dealer (for new vehicle).

• CIBIL/credit history consent.

For self-employed / transport operators

• KYC: Aadhaar, PAN, Voter ID / DL.

• Income proof: ITR (last 1–2 years), financial statements (if available) or GST returns (preferred by many banks).

• Bank statements (last 6–12 months).

• Proof of business/presence: Shop Act/Udyam/MSME registration (if any).

• Pro-forma invoice from dealer; vehicle valuation report (for used vehicles).

• Fleet list and existing vehicle RC, insurance (if refinancing or additional vehicle).

Banks like Axis publish a full list (age proof, photos, pro-forma invoice, bank statements, KYC, etc.). Always check the specific lender’s page before applying. Axis Bank

6) Processing time — how long from apply → disbursal?

Timelines vary by lender and completeness of documents:

• Pre-approved / retail dealer finance: many lenders (when documents are clean) can sanction within 24–72 hours and disburse within 48–72 hours for new vehicle loans (some banks run “express” dealer schemes). HDFC’s consumer products mention very fast disbursal timelines in dealer-led cases. HDFC Bank+1

• Branch/NBFC process for self-employed / used CV: can take 3–10 working days for sanction and a few more days for physical registration/hypothecation and disbursal depending on valuation, legal checks and RC formalities. Public sector banks publish internal timelines (SBI lists timelines for various loan types). State Bank of India+1

What slows it down: incomplete bank statements, unclear ownership history for used trucks, missing signatures, insurance or RC not in order, third-party vehicle valuation delays.

7) Fees & other charges (what to budget besides EMIs)

Typical charges (varies by lender):

• Processing fee / upfront fee: typically 0.5% – 1.5% of loan amount for many banks; some lenders/NBFCs may charge up to 3–5% for specific products. SBI and Axis publish processing fees such as 0.5% (SBI commercial) and up to 1.5% (Axis) with minimum amounts. HDFC lists processing fees up to 1.5% (and sometimes waivers). State Bank of India+2Axis Bank+2

• Documentation / stamp / valuation charges: small fixed fees (₹500–₹4,000) and stamp duty as per state. Kotak+1

• Hypothecation/RC-handling / courier charges: small fixed fees (₹200–₹2,500). Axis Bank

• Prepayment / foreclosure charges: vary — many banks permit foreclosure with conditions; check T&Cs. HDFC Bank

Example: SBI may charge 0.5% + GST processing for commercial vehicle loans; Axis may have a minimum ₹7,500 or up to 1.5% of the loan amount as processing. State Bank of India+1

8) Example EMI calculation (step-by-step)

You asked what monthly outflow looks like. Example: loan ₹20,00,000, rate 9% p.a., tenure 60 months (5 years).

1. Annual rate = 9.00% → monthly rate r=9%/12=0.75%=0.0075r = 9\% / 12 = 0.75\% = 0.0075r=9%/12=0.75%=0.0075.

2. Number of months n=60n = 60n=60.

3. EMI formula:

   EMI=P×r×(1+r)n(1+r)n−1EMI = P \times r \times \frac{(1+r)^n}{(1+r)^n - 1}EMI=P×r×(1+r)n−1(1+r)n​

   where P=2,000,000P = 2{,}000{,}000P=2,000,000, r=0.0075r = 0.0075r=0.0075, n=60n = 60n=60.

4. Calculate: (1+r)n=(1.0075)60≈1.601(1+r)^n = (1.0075)^{60} \approx 1.601(1+r)n=(1.0075)60≈1.601 (compound factor).
   Numerator: 2,000,000×0.0075×1.601≈24,0122{,}000{,}000 \times 0.0075 \times 1.601 \approx 24{,}0122,000,000×0.0075×1.601≈24,012.
   Denominator: 1.601−1=0.6011.601 - 1 = 0.6011.601−1=0.601.
   EMI ≈ 24,012/0.601≈₹41,516.7124{,}012 / 0.601 \approx ₹41{,}516.7124,012/0.601≈₹41,516.71.

5. Over 60 months you pay ~₹41,516.71 × 60 = ₹24,91,003; interest portion ≈ ₹4,91,003. (Numbers rounded to nearest rupee.)

That gives you a sense of monthly cash flow and total finance cost.

9) How to choose the right lender & reduce cost

• Compare Effective Rate (EIR), not just headline rate. EIR includes processing fee and other up-front charges — it’s the true cost.

• Get multiple quotes: use dealer tie-ups + direct bank/NBFC offers and compare total cost over loan life.

• Negotiate processing fee & partial waiver: many banks advertise fee waivers/offers during festivals and have scope for negotiation for good profiles. HDFC and others sometimes run processing fee waivers. HDFC Bank

• Improve profile: clear GST/ITR, maintain clean bank statements, improve credit score — even 1% lower rate saves huge interest on large loans.

• Consider tenure carefully: longer tenure reduces EMI but increases total interest — pick the shortest tenure with an affordable EMI.

• Check prepayment terms: if you plan to repay early, choose a lender with low/no foreclosure charges.

10) Quick practical checklist for application day

1. Pro-forma invoice from dealer (new) or RC + valuation + insurance (used).

2. KYC: PAN + Aadhaar + photos + signed application.

3. Bank statements (6 months) — bring hard copies and soft PDFs.

4. ITR / GST / business proof (if self-employed).

5. Fill bank’s sanction form, sign loan agreement, and provide post-dated cheques or ECS mandate.

6. Check processing fee, documentation charges, and exact disbursal conditions in sanction letter.

7. Get RC hypothecation clause handled: bank will mention hypothecation on RC; ensure dealer assists with registration formalities.

11) Common gotchas to watch for

• Used vehicle history: hidden dues, loans or tampered odometer — insist on clean RC and valuation report.

• Variable vs fixed rate: many CV loans are floating (linked to repo/RBI benchmark or bank’s reference rate) and can move. Clarify reset frequency and floor spread. ICICI Bank

• Insurance & registration delays: banks often disburse only after they see valid RC & insurance — factor that into delivery schedule.

• Extra charges: stamp duty, MOSAIC of small fees (RC collection, PDC return) — read sanction letter.

12) Where to start (action plan)

1. Collect your documents (KYC, bank statements, ITR/GST, dealer invoice).

2. Ask dealer for pre-approved offers (they often have faster turnarounds).

3. Get quotes from 2–3 banks/NBFCs and compare EIR and processing fees.

4. Apply online or at branch; follow up with the lender RM for any valuation/legal checks.

5. After sanction, ensure timely submission of remaining papers to speed disbursal.

Sources & further reading

• HDFC Bank — commercial vehicle finance product page (finance quantum / up to 100% finance). HDFC Bank

• SBI commercial vehicle loan — rates, tenure (7.50% p.a. onwards), processing fee details and timelines. State Bank of India+1

• Axis Bank — documents & fees for commercial vehicle loans (document checklist, processing fee min ₹7,500 / up to 1.5%). Axis Bank+1

• Market overviews / aggregator pages for interest-rate ranges (Bankbazaar, Moneyview). BankBazaar+1

• HDFC fees page — typical processing fees and valuation charges published by the bank. HDFC Bank