Very few people are able to purchase a semi-truck in cash. Financing is a popular way to obtain a truck, but what does it mean to get something financed? Getting financed involves an outside entity giving you the funds necessary to make a purchase. This is done with the understanding that the money will be paid back in full with interest. Below you will find information that will give you a better understanding of what financing a semi-truck involves.
Considerations Before Getting Financed:
Finance companies look at a variety of information in order to determine if they want to loan you money. Some of the most common things that they look at include your business revenue, how long you have been in the business, how much you are asking for, the amount of money you have as a down payment, and your credit score.
Credit Scores:
A credit score is defined as a number that is assigned to an individual that indicates the lenders capacity to repay a loan. Credit scores can be affected by past payment history, bankruptcy, child support, hard inquiries, credit utilization rate, and credit length. Finance companies want to see that you repay your loans and have had successful loans in the past. Typically, a good credit score is about a 600 or above. The higher the score, the more options you may have in terms of an approval. Don’t let a weak credit score deter you though. Truck Mart LLC considers more than just your credit score and we work to get you an approval that will suit your business needs.
Installment Credit = A fixed amount borrowed that is paid back in the form of a monthly payment. If you get a semi-truck financed, you will be expected to pay back the amount in the form of a fixed monthly payment. Other examples of installment credit include student loans and mortgages.
Revolving Credit = The main example of revolving credit involves credit cards with a fixed credit limit. There is no fixed monthly payment, but rather, the borrowed amount is repaid in order for the individual to regain access to the full credit limit again.
Down payment:
The requested down payment amount will vary from person to person. A down payment is the initial amount of money paid when something is bought on credit. Some finance companies will expect a higher down payment if an individual has poor credit because that lessens the total amount of money needing to be borrowed. We recommend that you put money aside each month for the purchase of a new truck. Understand that the day will come when you need to replace your truck and plan ahead accordingly. By doing this, you won’t have to stress about scrounging up down payment money when it is time to finance new equipment. Trade ins can also count towards your down payment! Call us at (800) 377-3101 to receive personalized advice regarding the best financing options for you.
Collateral:
When you get a semi-truck financed or leased, the equipment serves as collateral if you fail to repay the borrowed amount. In essence, this is why it is so important that you make your monthly payment. If you stopped making your mortgage payment, the bank would take possession of your house. Getting a semi-truck financed is no different. The finance company deserves to get their money back, so plan on making your payment on time every month. Don’t risk getting your truck repossessed because you failed to think ahead. The most successful businessmen are the ones that have the ability to look towards the future. Click HERE to view our post that focuses on money management for truckers.
Insurance:
Before you will be able to drive away with your financed semi, you will need to show proof of insurance. This is required by the finance companies because if the equipment gets totaled, they will still get their money back. Having a good insurance policy on the truck protects you by ensuring that your finance company will be repaid what they are owed in the event that the truck breaks down or is involved in an accident.
What we can do for you:
We understand that financing a semi-truck can be intimidating, but our staff are willing to work with you to ensure that your needs are met. Truck Mart LLC works with a variety of finance companies which allows us to handcraft each approval. Bad credit? No problem! We have gotten many of our weak-credit customers financed. Our deals have low monthly payments, no hidden fees, and the approvals are quick. Click HERE to read more about our financing options or click HERE to fill out a free application today!
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Truck Mart LLC
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