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Chattel Mortgages

Are you a business owner and are looking for car financing options that will help you purchase a vehicle mostly for business purposes or upgrade from your old one? We believe a Chattel Mortgage is the right option for you.

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Chattel Mortgages Overview

A Chattel Mortgage is similar to a secured car loan in the sense that a financier loans you money to purchase a business vehicle and you take ownership of the car upon purchase but the vehicle will act as security to the lender until you pay off the entire loan. Therefore the β€œchattel” is your car and the mortgage is the loan itself. The difference between this loan and a secured car loan, is that a Chattel Mortgage is mostly used by business owners and operators eg. tradies and its a loan specifically built for commercial car purchases. Some financial institutions call it a car or equipment loan. Heavy equipment such as bulldozers or forklifts and other varieties of movable equipment can be purchased using a chattel loan.

A lender may provide the funds for you to purchase the vehicle which you will take ownership of at the time of purchase. The financier places a mortgage on the vehicle whereby the vehicle acts as security against the loan. Though once the contract ends and you finish paying off the loan, you take complete ownership over the vehicle. You can pay back the loan installments on a monthly, fortnightly or weekly basis as it all depends on the arranged agreement. For this loan type, you can choose to pay a lump sum amount to reduce the amount you owe which is normally referred to as a Balloon Payment. Last but not least, you can finance a new or used vehicle and equipment of reasonable age and condition. The amount financed may also include your on road charges and insurance as well.Β 

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A Chattel Mortgage repayment calculator can be used to determine how much your repayment amount will be and also to compare the different car loan options as well. All you need to do is enter the loan amount, term of the loan, the interest rate and repayment frequency.

  • You may have the option of setting up a balloon payment at the end of the loan term so as to lower your monthly repayments.
  • Interest rates may be lower than unsecured loans since the vehicle is acting as collateral
  • Repayments are flexible and can be fixed at the same amount each month or can be structured to fit your cash flow requirements
  • Repayments can be structured over a range of terms usually to 2 years to 5 years.
  • Your business has the ability to claim for a tax deduction for the depreciation on the vehicle as well as the interest component of the loan repayments depending on how much you use your car or equipment for business use.

At Braid Finance we have helped hundreds of Australian’s get an approval for a Chattel Mortgage loan hence saving them time, money and the hassle of applying for a loan. We have partnered with some of the best financial institutions all in one place so you are guaranteed to get some of the best deals in the market. Get in touch with us if you have any more questions or if you need help choosing the right loan for you.

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