Uttar Bihar Gramin Bank Commercial Vehicle Loan

Expanding your transport business—or launching one—shouldn’t be a paperwork maze. With Uttar Bihar Gramin Bank (UBGB) Commercial Vehicle Loan, you get a clean, predictable way to finance new commercial vehicles: four-wheelers, trucks, buses, tankers, pickups and more. Below is a simple, human-friendly guide to eligibility, limits, pricing, security, and smart ways to use the loan so your vehicles start paying for themselves fast.

What this loan is for (Purpose)

A dedicated facility to purchase new vehicles for commercial use only—hiring, goods carriage, passenger transport, logistics, last-mile delivery, school/office routes, etc. It’s designed to cover the on-road cost (as per bank policy) so you can deploy the vehicle and start billing quickly.

Who can apply (Eligibility)

• Individuals aged 18–65 years at the time of application (and within policy at loan maturity).
• First-time owners and existing fleet operators are welcome—provided basic KYC, income checks, and route/permit viability are in order.

Tip: If your income profile is thin, consider adding a co-applicant/guarantor with steady income to bolster eligibility.

How much you can borrow (Loan Amount)

• Finance up to ₹2.00 crore, with a cap of maximum 5 vehicles under this scheme.
• Sanction depends on income, repayment capacity, vehicle type, expected route earnings, and overall risk profile.

Right-sizing matters. Finance only what your routes can comfortably repay; oversizing the ticket can strain cash flows early on.

Your contribution (Margin Requirement)

To keep EMIs workable and skin-in-the-game healthy:

• 15% to 25% margin (your down payment), depending on ticket size and profile.
• The bank clarifies what portions of on-road cost (ex-showroom, RTO, insurance, accessories) are financeable for your case.

Tenure, moratorium & repayment (Repayment Terms)

• Tenure: up to 60 months (5 years)
• Moratorium: up to 6 months (maximum), so you can register the vehicle, secure the route/permit, and begin operations before full EMIs kick in.
• EMIs are auto-debited monthly—pick a date that aligns with major client payouts for smoother cash flow.

Quick EMI sense-check (illustrative)

At 11.00% p.a. for 60 months, the EMI is about ₹2,174 per ₹1 lakh.
So, ₹10 lakh ≈ ₹21,740/month (indicative; your sanction letter will show exact figures).

Pricing you can plan for (Interest Rate)

• Indicative rate: 11.00% p.a.
• Final pricing depends on internal appraisal and policy at sanction. Even small rate differences change total interest materially over 5 years—confirm the day’s rate before you lock in.

What you pledge (Security Options)

• Primary security: Hypothecation of the vehicle financed—reflected on the RC until loan closure.
• Collateral: May be offered if you have it; not mandatory when covered under CGTMSE (as per eligibility/policy).
• Insurance: Comprehensive motor insurance with hypothecation noted is mandatory; consider add-ons (zero-dep, RSA) if your routes demand it.

Prepayment = pure flexibility

• No prepayment penalties. Part-prepay whenever you have surplus (ideally reduce tenure to save the most interest) or foreclose when business is booming.

What to bring (Documents checklist)

Your branch will share the exact list for your profile/vehicle type.

• KYC: PAN, photo ID, address proof, photographs
• Income proof: Salary slips and bank statements (salaried) or ITRs/financials and bank statements (self-employed/operators)
• Business/route papers: Permit/route plan, proposed contracts/LOIs if available
• Vehicle documents: Proforma invoice/quotation with on-road breakup; dealer details
• Other: Existing loan details (if any); for CGTMSE cover, any forms the bank requests

Neat paperwork = faster sanction and disbursal.

How the process works (Step-by-step)

1. Pick the vehicle & get a quote: Shortlist the model suited to your route and payload; collect a proforma invoice.
2. Discuss with UBGB: Share route economics (expected trips/day, average load, rate per trip/km), margin you’ll bring, and whether you need moratorium.
3. Submit documents: KYC, income/financials, and any route/permit evidence.
4. Sanction & documentation: Review sanction terms—amount, rate, tenure, margin, security/CGTMSE, moratorium.
5. Disbursal: Typically made to the dealer after hypothecation formalities and insurance.
6. Registration & start operations: Ensure permit/fitness/insurance are aligned; begin billing and track cash flows against EMI.

Smart operating tips (to keep EMIs stress-free)

• Start with confirmed demand. A fixed route/anchor client (school/contractor/aggregator) stabilizes cash flow from month one.
• Budget TCO, not just EMI. Fuel, tyres, periodic service, tolls, driver wages, permits, taxes, insurance—plan these alongside EMI.
• Build a buffer. Keep 1–2 months of EMI equivalent as reserve to handle off-season or repairs.
• Service on schedule. Manufacturer-recommended maintenance extends tyre/engine life and reduces surprise downtime.
• Use tech. GPS/telemetry helps optimize routes and discourage fuel pilferage—often paying for itself.
• Part-prepay after peak seasons. Diwali/wedding/harvest peaks or a large contract payout is a great time to trim tenure.

Frequently asked (straight answers)

Is there a maximum number of vehicles I can finance?
Yes—under this scheme, up to 5 vehicles (within the ₹2.00 crore cap).

Can I club income with a co-applicant?
Yes—adding a co-applicant (family/partner with stable income) can boost eligibility.

What costs are financed?
Typically ex-showroom; eligible portions of RTO/insurance/accessories per policy. Your branch will confirm inclusions.

Do I need collateral if I opt for CGTMSE?
CGTMSE coverage may allow collateral-free sanction as per eligibility and policy. Hypothecation of the financed vehicle is always required.

When do full EMIs start if I take moratorium?
After the moratorium (up to 6 months max), regular EMIs begin for the remaining tenure.

Can I repay early without fees?
Yes—no prepayment charges for part-payment or foreclosure.

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Bottom line: UBGB’s Commercial Vehicle Loan gives transport operators a crisp, workable structure—up to ₹2.00 crore, max 5 vehicles, 11% indicative rate, 15–25% margin, tenure up to 60 months, optional 6-month moratorium, and no prepayment penalty—with the right security options (hypothecation/collateral or CGTMSE). Walk into your nearest UBGB branch with your route plan and proforma invoice, and drive out a plan that turns every kilometer into steady cash flow.