Chattel Mortgage

Make purchasing commercial vehicles or equipment simpler with a low-rate chattel mortgage through RoadLoans.

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Simple commercial finance with RoadLoans

When buying an asset for your business, taking out a chattel mortgage is a great way to help make your commercial purchase and manage its repayments more effectively. Whether you’re purchasing a new or used car, a specialised vehicle like a tractor or forklift or any type of valuable equipment, we can help you get approved for the finance you need at RoadLoans.

Your dedicated RoadLoans consultant will be able to draw from our panel of more than 25 trusted financiers from around the country to pick out the most suitable chattel mortgage offer for your business. Enjoy low rates and fees, flexible repayment terms and a range of tax benefits to take advantage of. Start the process of applying for finance with us today and own your asset before you know it.

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Wide panel of financiers

We’re partnered with a range of lenders across Australia to help maximise your chances of securing the best deal for your business.

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Dedicated team of consultants

You aren’t alone in the process. Our experienced consultants will help you along the way to get your loan approved for the right price.

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Convenient online application process

Time is money when you’re running your own business, so you can complete your application online from your computer or smartphone.

The features and benefits of a chattel mortgage with RoadLoans

Access affordable rates and fees

Commercial finance rates are often the lowest in the market when it comes to purchasing assets, so you can get approved for an affordable loan from the get-go.

Choose your preferred loan term

Each business is different in terms of how long they need to repay their finance agreement, so you can choose from terms as short as one year up to as many as seven.

No deposits required

There’s no need for you to stump up a significant lump sum at the beginning of your loan agreement if you don’t wish to, with finance available up to 100% of the value of your asset.

Set your ideal residual value

You can not only choose whether to attach a residual or balloon payment to the end of your agreement (as doing so is optional) but also decide on how much you want to pay.

Customise your repayment schedule

Additionally, you can decide whether to make your chattel mortgage repayments on a weekly, fortnightly or monthly basis in line with your business’ revenue generation.

Various tax benefits

Chattel mortgages enable you to take advantage of a range of tax benefits, such as claiming for interest on your loan, depreciation of your asset and GST on the purchase price.

Fixed repayments

Because your interest rate will be fixed from the start of your agreement, you’ll know how much you’ll need to pay each month, making it simpler to budget around your instalments.

Own your asset from the outset

Unlike commercial leases, owning your asset means you have full control of how it’s used, modified and updated from the moment your contract is signed and you receive it.

The RoadLoans chattel mortgage application process

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Fill out a quick quote

You can complete a quick quote right here with RoadLoans, as well as fill out your initial application, after which your consultant can get to work finding your loan.

Compare your options with your consultant

Once they’ve found a suitable chattel mortgage offer, they’ll confirm it with you (and compare other suitable options) before they proceed with the application.

Have your application prepared for approval

From there, your consultant will do the work for you, preparing your application in line with your lender’s criteria and submitting it to them for approval.

Sign your contract and own your asset

Once your lender is happy with the application, you’ll be sent a loan contract to sign and return, after which the funds can be transferred and you can own your asset.

Chattel mortgages explained further

What are chattel mortgages and how do they work?

A chattel mortgage is a type of asset finance designed to be used by businesses. In terms of its structure, it’s very similar to a standard consumer car loan: you’re approved for a set amount to purchase an asset, which you repay in weekly, fortnightly or monthly instalments over a pre-determined period until it’s fully repaid. You own the asset from the moment you receive access to it, meaning it can be counted on your company’s balance sheet immediately.

As mentioned, you can choose how long you can take to repay your chattel mortgage (provided you can clearly show that your business’ revenue is enough to comfortably support the repayments you’re after). You can also decide whether to pay a deposit or attach a residual payment (also known as a balloon payment) to the loan, both of which are optional. While a deposit is a lump sum at the beginning of your loan, a residual is paid at the end of your agreement. Attaching a residual payment will reduce the cost of your instalments, as that amount is effectively taken out of your repayments until the conclusion of the term.

Chattel mortgages are flexible in terms of how they can be used, with a variety of different assets able to be purchased. These include:

 

You can apply for any of the above asset types and more by applying with RoadLoans today and speaking with one of our friendly consultants.

What are chattel mortgages and how do they work?

You can apply for any of the above asset types and more by applying with RoadLoans today and speaking with one of our friendly consultants.

How should I compare chattel mortgages?

There’s a range of areas in which you can compare chattel mortgages from different lenders. Your consultant will help with much of this work in the process of considering your application, but it’s still valuable to know the areas to look for on different offers. These include:

  • Interest rates: the lower your rate, the more you’ll save overall. Even on a $30,000, three-year loan, opting for a 5.5% p.a. rate instead of a 6% p.a. rate would save almost $250.
  • Fees: several fees can apply to your chattel mortgage, including an establishment fee (up to $700), ongoing fees (up to $20) and early repayment fee (up to $600 to $900). However, each of these can be waived on a case-by-case basis.
  • Term lengths: make sure the lender you’re applying to can accommodate the term length you’re after. Not all will be able to offer the full one to seven-year range, but your consultant will make sure to only consider those who offer your preferred period.
  • Minimum loan amount: if you’re looking at a smaller loan, such as for a less valuable asset or as part of a larger deposit, make sure your lender has a low enough minimum chattel mortgage. These typically start at $5,000 but may be higher with some lenders.
  • Asset requirements: different lenders will also have different requirements when it comes to the age and condition of the asset you’re looking to buy. We can help you get approved for finance for vehicles 20 years or older.

Top tips for saving money on your chattel mortgage

Pay an upfront deposit

Perhaps the simplest way of reducing the cost of your loan is by reducing its size. The smaller your loan, the less you’ll pay in interest and the sooner you’re likely to be able to pay it off. For example, paying a $5,000 deposit on a $50,000, five-year chattel mortgage at 5% p.a. would save you over $650 overall.

Select a shorter repayment term

A shorter chattel mortgage term will save you on interest, as well as recurring fees, as your outstanding loan debt on which interest is calculated will reduce at a faster rate. As a result, you’d save over $1,000 taking out a three-year loan at 7% p.a. compared to a five-year loan at 5% p.a. (although costing you $600 more per month).

Look around for opportunities to refinance

Just because the loan you’ve locked in right now is the best rate on the market doesn’t mean it will be down the track. Always keep an eye out for offers from other financiers when paying off your loan, as you could potentially save a significant amount by switching. However, it’s important to consider early repayment fees here.

Build your business’ credit score

When it comes to asset finance, the higher your credit score, the lower your interest rate is likely to be. Lenders look for borrowers with positive credit histories and strong records of repaying similar debts, so if your business is up to date with its debts (or has repaid similar loans previously), you could secure a cheaper loan.

More common questions about chattel mortgages

If you don’t have any residual payment attached to your chattel mortgage, the mortgage will be lifted from your asset and you’ll be able to own and operate it free from your lender. If you have a residual payment, you have several options available to you, which are:

  • Pay the residual and continue to own the asset
  • Sell or trade in your asset to cover the value of the residual and buy or lease your next asset
  • Refinance the residual to extend your current loan term

In most cases, you can have your chattel mortgage application approved, processed and funded 48 hours after you submit your initial application. However, the time it takes to approve your business for finance may ultimately depend on its track record repaying other debts, as well as the lender you apply with. Your consultant will endeavour to have your application turned around as quickly as possible so you can access your asset as soon as you can.

Yes – you can use your existing vehicle to offset the purchase price of your next business vehicle. Doing so will reduce your loan amount and help you save a significant amount overall.

No – as per chattel mortgage requirements, you must use your purchased asset for commercial purposes at least 50% of the time. There isn’t any obligation for you to use your asset for commercial purposes 100% of the time.

Not necessarily – while a residual payment will reduce the cost of your repayments each month, you’ll likely end up paying more in interest compared to a loan without a residual. This is because instead of reducing to $0, your loan debt decreases to whatever the value of your residual is (such as $5,000). This means your outstanding debt decreases at a slower rate, which in turn means the interest charged will stay higher for longer.

Hire purchase is a different type of finance whereby a business agrees to rent an asset for an agreed period and has the option to purchase it at the conclusion of the term. This is similar to a lease but allows businesses to claim GST on the purchase of the asset. Typically, hire purchases are more common for businesses who conduct accrual accounting, rather than cash accounting. This means revenue and expenses are recorded at the point of transaction, rather than when they’re received or paid.