I’m running a small business and thinking of getting a vehicle for business use. Is it possible to take a car loan specifically for that? And is it different from a regular car loan?
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Yes, you can avail business loans in India-
Commercial Vehicle Loan, the loan is extended by banks and NBFCs to businesses, self employed individuals, and transport operators. The loan typically mandates business related papers like proof of business, ITRs, and bank statements. One of the significant advantages of opting for a commercial vehicle loan is that the vehicle gets registered in your business name, and you can claim tax benefit like depreciation and interest on EMI as a business expense.
Or if you’re purchasing a normal car and intend to use it for personal purposes and even occasional commercial purposes, you can opt for an ordinary personal car loan. But in this case, you cannot claim the complete tax advantages as when using a commercial vehicle loan. Before applying, it’s important to understand how you’ll be using the car, as using a personal car loan vehicle for full-time business can lead to difficulties with loan terms or insurance coverage. So, choose the loan type based on your usage and documentation readiness.