- October 16, 2024
- Posted by: Sergey Grushetskiy
- Category: Semi Truck Financing
As a new owner-operator, you are armed with a business plan and a desire to get on the road. Except, you need to secure the right financing in order to purchase your truck.
Semi-trucks are a big investment. So, it is no surprise that lenders look for key factors when determining whether or not borrowers are approved for a loan. Knowing what they are and what alternatives are available can help you to successfully get your business going.
This article is your comprehensive guide to understanding semi-truck financing.
The Power of the Credit Score
Your credit score is one of the most commonly used factors in determining eligibility for a loan. Why? Because it lets the lender know just how reliable you are when credit is extended to you.
The higher your credit score, the higher your chance for loan approval — with a good interest rate.
Does this mean you cannot get a loan to purchase your semi-truck if you have bad credit? Not necessarily. But, if you hope to secure a traditional loan, you will want to do what you can to ensure your score is admirable — pay your bills on time and reduce your outstanding debt.
Why Your Down Payment Matters
You are going to want to have a down payment when purchasing a semi-truck. This not only acts as a bit of security for the lender, but it can reduce the amount of the loan you will need to take to make your purchase.
A large down payment can greatly improve your financing options as well as their terms. Are you struggling to save up for the down payment? Having a minimum down payment doesn’t necessarily mean you won’t find yourself without a loan, but note that it may not be as favorable.
Details About Your Truck Can Impact Your Financing
When you apply for financing, know that the lender is going to want details about the semi-truck you want to purchase. After all, they are providing you with the funds and want to make sure that it is a healthy investment.
They may look at:
- The type of truck, including make and model
- The age of the truck
- The mileage
- The condition of the truck
All of these things are typically taken into consideration when determining if you will be approved for a loan, as well as the terms of it. Assuming other factors check out, a new semi-truck with low miles will likely get you approved for a better loan.
Your CDL Experience Can Play a Role
It is important to note that your potential lender will take a look at your CDL experience. They want to see how many years of experience you have as well as any accidents, tickets, and the like.
This reflects just how responsible you will be for your new purchase.
If you gave a good history then you are more likely to care for your truck and use it for years to come. This also means you will be working and paying back your loan. Those lacking experience tend to be viewed as higher risk and may not have as favorable loan terms.
Talk to the Semi Truck Financing Experts
If you are ready to get your business off the ground and purchase your semi-truck, the finance experts at 10-4 Financing, LLC are here for you. With an easy application process, great deals on semi-trucks across the United States, and options for those with bad credit, we are your go-to funding source.