Understanding Chattel Mortgages
Understanding chattel mortgages is crucial if you are interested in an excellent financial solution for your business car financing
. Most businesses prefer the chattel mortgage to the traditional secured car loan options.
With a chattel mortgage, you will discover that you have more choices such as keeping low repayments, including a residual or balloon, and financing the upfront deposit along with the full purchase cost of the vehicle.
How Do Chattel Mortgages Work?
A financial lender will give you a loan which will cover the entire purchase price of the car. Upon the last repayment, you will become the legal owner of the vehicle which is known as the chattel.
Instead of external collateral, the financial lender takes out a mortgage on the vehicle and this is considered as the collateral for the loan. After the contract has been completed, the owner of the car will be given all rights to the vehicle in question.
The Benefits of Using a Chattel Mortgage
There are various benefits of using a chattel mortgage compared to other types of financial loans for purchasing a vehicle. Such benefits of taking out a chattel mortgage include the following:
Tax deductions for business purposes
Fixed interest rates
There is no GST charged on the monthly repayments
There are lower interest rates since the finance is actually secured against the vehicle
You will be aware of all costs in advance rather than surprise fees coming up
You can opt for a flexible contract of anywhere from two to five years
For these benefits, the chattel mortgage has become extremely popular. The tax benefits also drive most businesses towards the chattel mortgage instead of to other alternative loan options. You can begin researching different chattel mortgage options online and speak to lenders who offer these services.
You should always compare rates and charges as you are bound to find a deal that is more appropriate for your needs. Finance consultants should be able to answer all of your questions. If they cannot, you may want to consider taking out a chattel mortgage with another lender.
Who Should Take Out a Chattel Mortgage?
A Chattel mortgage is best suited for business owners whose main method of accounting is with cash since they are allowed to claim GST from the business car's up front price. However, any one who uses their car for business related work can benefit greatly from the use of a chattel mortgage. For this reason it is important to understand chattel mortgages, especially over other alternative car loans.
Understanding Chattel Mortgages
By: ElizabethMclean
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