Refinance, commercial vehicle loan

Introduction of commercial vehicles:

A commercial vehicle is any type of motor vehicle used for transporting goods or paying passengers. Commercial vehicle loans are loans offered to borrowers, usually self-employed individuals, trusts, partnership firms, organizations, etc., for the purchase of vehicles for commercial or business purposes. These Car loans are availed by those who are involved in the transportation business. A commercial vehicle loan can be used to purchase buses, trucks, tippers, tankers, and light and small commercial vehicles.

Types of Commercial Vehicle Loans:

1. New commercial vehicle loan: This type of commercial vehicle loan is provided to the customers for the purchase of new commercial vehicles for business purposes. Banks offer up to 100% funding on the chassis or base frame value of the vehicle. Some of the banks provide additional funding for the body construction of the vehicles in selective cases based on the borrower’s profile.
2. Old commercial vehicle loan:

Old or used commercial vehicle loan are those loans which are offered to purchase all makes of pre-owned or used commercial vehicles. Under this loan, borrowers can expect to get finance against old vehicles which are up to 15 years old. Most of the banks provide up to 90% funding on the used vehicle’s value or depreciation grid value.

3. Commercial vehicle refinancing:

Under commercial vehicle refinancing, banks either offer loan on an existing vehicle which is free of loan or take over an existing commercial vehicle loan and provide additional finance for it based on eligibility. While some borrowers can reduce the monthly EMIs of their existing loan and free up some cash by refinancing an existing loan at lower interest rates, some others can get direct finance on their free vehicles to meet their working capital needs.

Who are eligible for a commercial vehicle loan?

Banks and other lenders offer commercial vehicle loans to a broad array of customers to meet their business needs. Here is the list of the consumers considered to be eligible for this loan:

· Individuals

· First-time users and buyers

· Small, medium, and large-sized fleet owners

· Proprietorship firms and Partnership firms

· Public Limited & Private Limited Companies

· Trusts and societies

· Schools and colleges

· Captive customers and transporters

Salaried and self-employed individuals can co-apply for a commercial vehicle loan with blood relatives or family members. On the other hand, the partners in partnership firms and the directors in private limited companies can jointly apply for this loan.

Required Documents for refinancing commercial vehicle loan:

Mentioned below are commercial vehicle required documents. This table includes 3 parts

1. Individual
2. Pvt Ltd. Firm
3. Proprietorship Firm

Process of commercial vehicle loan:

All 20 processes for commercial vehicle loans run successfully.

1. Searching for customers: In this process, BDM/DSA searches for customers through;

A.   Tele calling.

B.   Directly approach customers.

C.   Existing customers to do refinance.

2. Information gathering from customers: In this process, BDM/DSAs gather customers’ profile information. Like ID Proof, Address Proof, Permanent address, KYC details, Occupation details, Sources of Income, and Property proof, what purpose customer required a vehicle? If having other loan details.

3. LTV Calculations: LTV means Loan to Value. It shows loan amount funding percentage-wise. If doing more LTV percentage for the customer must take approval from under the level heads (credit approval). 

 LTV= Finance amount /Asset cost

4. Grid matrix checking: In this process, we got the minimum & maximum grid value amount in this grid matrix. If in case don’t have a grid in the proposed vehicle model take approval from the credit department.

5. CIBIL: CIBIL checking to know if the customer is either good OR bad. In this, we know easily customers’ other loan obligations. CIBIL shows EMI Details, Cheque bonus, and Overdue amount details. CIBIL process shows customers’ scores.

A.    350 – 590 – POOR

B.    590 – 750 – AVERAGE

C. 750 – 900 – EXCELLENT

6. Document process: After CIBIL checking BDM/DSA will meet the customer directly & collect documents with signature. BDM/DSA’s full fill the documentation process with their OSV seal, signature, and EMP. code & date. Send this file to the login process.

7. Login process: After the documentation process will do login the customer profile in the system software. Customer all documents will scan & uploaded to the system. In this we select customer segmentation, scheme code, loan amount, DL details, RC details, if existing customer means upload RTR (Repayment Track Record) details & group exposure details update EMI, update IRR percentage, if a customer has vehicle update fleet details, upload bank statement. In this login process, we will request for CAM (Credit Approval Memo).

Two types of login process:

A.   Login process in the software application. (Customer has 1 to 2 vehicles & requires 1 vehicle)

 B. Login process in manual. (Customer having 3 or more than 3 vehicles & required more than 1 vehicle)

8. FI Process (Field investigation): FI is mandatory for all customers because the financer must know his customer’s home. FI verification shows the customer’s ability & stability. FI to we will get positive case will move if FI is negative, we will reject the case. FI process main aim is incised future customer is not paying his EMI’s within date collection staff will meet customer directly & collect EMI. In BT cases it's mandatory because we are handling used vehicles.

9. RCU Process (Risk Containment Unit): RCU means risk containment unit it is a mandatory process in very financial sector because in this process RCU department screened every KYC document. In any doubt accrued in the document screening process, they will sample that document. The sample report will take some time like 2 or 3 days. After getting the sample report case will move to the next process. All KYC documents must be clear & original.

10. CAM Generation process: CAM means Credit approval memo. After all customer profiles updating in the system & uploaded all required KYC documents, we will get CAM generation.

For CAM generation required documents are:

• KYC documents. (Aadhar card, Pan card, DL, etc)
• Updating correct scheme code, norm code & customer segmentation.
• If existing customer required repayment track record with ATR/GTR/ETR/PTR status & group exposure details.
• If the customer having own vehicle required a fleet list.
• If a customer has another bank loan required repayment track with track validation in excel format in case status is terminated required NOC.
• Proper vendor details Selection (the company is financing to hither customer, financer, or both financer & customer.)
• Selection of CLI with documents.
• FI reports & RCU reports.
• If it is a BT case required a settlement letter (pre-closer letter).
• Customer 6 months bank statement transaction.
• Updating proper KYC details in the system.
• Priority sector lending (PSL) declaration form.
• GST declaration form (If having GST No., it must mention in the system.)
• If customer leaving rented home required self-declaration form.
• If the applicant & co-applicant have the same address but, one person doesn’t have address proof means the required annexure B3 form.
• If Firm in deal required IT returns of 2 years with balance sheet & profit & loss A/c. if company turnover is more than 2 crores require 3CD 3CB.
• If a firm is PVT LTD. Required MOA & AOA documents.
• If it is a partnership firm required partnership deed documents.
• If name mismatch in bank statement required name mismatch form.
• If it is a firm in a deal that required work order documents.
• Grid sheet required (If a company-provided grid sheet doesn’t have the proposed vehicle model, must require approval from credit.)
• Property proof required a property-based scheme, it is a must-have in the name of the applicant or co-applicant.
• 2 years of existing valid transport DL is required if it’s done in DL based scheme.
• Proposed RC required with valid insurance.
• CIBIL, dedupe & asset dedupe required.
• If address proof is gas bill required gas book also both have the same address.

11. Tele verification: After getting the CAM 1st we have to do the verification with the applicant, co-applicant & guarantor. Because customers must know purchasing vehicle details & loan details. Do we also know about customers who will drive the proposed vehicle? Customer is having DL or not? How much of his income? & Nature of business? etc

12. Credit approval: After CAM generation we will be taking credit approval. In this process they are required:

• Proposed vehicle RC
• B extract copy of RC OR Vahan RC copy for hypothecation
• Valid insurance of vehicle with IDV.
• Check all clear KYC documents (Aadhar, Pan, DL, Passport, Etc) for ID proof, Address proof, and income proof.
• Property proof in the name of applicant or co-applicant
• The proposed vehicle valuation report for the valuation amount must be greater than to grid amount.
• The grid matrix sheet for the grid amount must be greater than to finance amount.
• 2 years of existing valid transport DL of applicant & they must know customer for what purpose taking a vehicle?
• FI verification reports it must be positive status with no deviations, if it has any deviations or negative status case will be rejected. FI reports must be positive because they know this customer’s stability in that particular house & geo limit from the branch.
• RCU (Risk containment unit) reports with screened. I have sampled is required sample reports with positive status, if it comes with a negative status case will be rejected.
• CIBIL reports of applicant, co-applicant & guarantor with no overdue amounts, if have an overdue amount in any finance or banks customer must be clear.
• If customers have any loan obligations in any finance required repayment track with track validation in excel format. If the status is terminated requires NOC.
• Credit manager check bank statement, ITR with balance sheet & profit & loss A/c, if company turnover is more than 2 crores require 3CD 3CB, GST Certificate, Partnership deed for partnership firm, MOA & AOA for PVT LTD firm If it is proprietorship firm require proprietorship deed this document shows business proof.
• Dedupe reports of applicant, co-applicant & guarantor it must be positive status.
• Checking the Funding loan amount, IRR percentage, EMI amount, Moratorium period, Norm code, scheme code, LTV percentage, Etc 
• The professional of the applicant & his income sources for how the customer paid his EMI amount.
• If the customer is existing in our finance or bank required repayment track & group exposure, if the status is terminated required NOC.

These all parameters to credit managers will give credit approvals to cases.

13, Insurance department: The insurance department is very useful to finance or banks to recover money in case a customer met death. This department will follow up with its customers from the beginning.

14. Sales approval: After CAM & Credit approval we must take sales approval from the sales head. They also check all documents & support to BDM/DSA/TSMs. They all so check all required documents as per company norms & give approvals to BDM/DSA/TSM if it’s come to their under-approval limit.

15. Move to RO: After CAM, the Credit approval & sales approvals case will be a move for RO (release order) it will be given operation department.

• Security PDC
• NACH mandate form
• Form 34
• If the case is repurchased required a repurchase form or its BT case required BT form & 100rs E-stamp.
• Sanction letter
• Agreement 

16. Operation department: The operation department will check all physical files, give RO & make payments those cases are approved by HO. They use SAP & SAGE applications for this process. They clear any problems accrued in cases.

The required documents are:

• All clear KYC documents for ID proof, and address proof.
• Bank statement for income proof.
• Property proof for the property-based scheme.
• 2 years of existing valid transport DL required.
• Proposed RC with Vahan RC.
• Valid insurance copy of vehicle with IDV.
• If it is a BT case required a settlement letter (pre-closer letter).
• If it is a BT case required BT form & 100Rs E-stamp.
• Required Reperches declaration for researches cases & customer original RC for HP transfer process after transfer they will give back. 
• Customer is existing required Repayment track in case status is terminated required NOC.
• Dedupe reports & CIBIL reports.
• Required ITR documents with the balance sheet, profit & loss A/c.
• Grid matrix for grid amount.
• Login checklist with FAN No. for checking all received documents.
• Deal sheet for vehicle details.
• DSA declaration for DSA cases.
• Application with fill all required details like norm code, scheme code, etc
• If a customer has rented a house required self-declaration.
• If customers don’t have a pan card required from 60.
• GST declaration form requires.
• If it is a partnership firm required a partnership deed with halite shares of partners.
• If it is a proprietorship firm requires a proprietorship deed with halite shares of proprietors of that firm.
• If it is PVT LTD firm required MOA & AOA documents.
• Check all documents with BDM/DSA’s seal, date & signature.
• Check all customer-provided documents with their signature & date.
• Required Disbursement memo sheet to know details of the file.
• Required credit life documents (CLI form)
• Required agreement & booklet of a particular case with customer signature.
• Required 4 PDC cheques for the repayment process.
• Required sanction letter with correct information.
• Required tenure extension form.
• Required end-use declaration.
• Required NACH forms with customer signature.

These all parameters to operation department will give RO to cases.

 Other duties & responsibilities of the operation department are:

1.    Creating File No., applicant code No. & contract No. for each and every file.

2.    Checking of customer signature in all NACH & PDC’s found any mismatching signature inform to particular BDM/DSA & collect new NACH/PDC.

3.    After RO & payment they will prepare each & every customer NACH & cheque within EMI presenting date.

4.    Upload RO sheet, DM sheet & Branch booking checklist to book each & every file.

5.    Each & every file’s E-stamp & agreement will be scanned & uploaded in particular FAN no.

6.    Repurchase scheme all cases will be updated RC after transferring hypothecation in SAP.

7.    Maintaining cash counter every day.

8.    Providing RTR & group exposure for existing customers’ details for the refinancing process.

9.    Maintaining all file details in excel report every day and finally sending all physical files to head office.

10. Resolving any issues comes in during this process.

17. Disbursements department: The disbursement department process is to disburse the amount to RO realized cases through NEFT/RTGS/Cheques. In this, they give disbursed cases UPI No’s information to the operation department.

18. Collection department: The Collection department is one of the very important departments. If the customer does not pay their EMI amount, they are following up and meet directly if any risk they accept and clear all EMI’s to the customer. Its income department for all BANKS OR NBFC.

19. Legal department: The legal department is one of the most important departments. Collection department & customers have any conflicts during collecting EMI. If the customer will not be paying EMI that case to come legally. In this department, managers will follow up legally. Finally, clear the customer EMI amount this is the process of the legal department. In this, they are sent to customers legal notice 3 times then also customer not responding department will take legal action to that particular customer.

20. NOC Department: NOC (No Objection Certificate) is a loan status confirmation from Bank or NBFC. It is a loan termination certificate after getting NOC customer will go to RTO to submit FORM-35 and transfer hypothecation of his RC. It is mandatory for every customer. After providing NOC they will be updated terminated status in system software.

Aim of this department:

• Prepare the NOC for the customers who are ready to pay the overdue amount & cheque bounce charges if any.
• Do not provide the NOC whose EMI’s are in due.

Annexure

1. Customer segmentation: Customer segmentation means under which norm we are doing the case like,

• Property base
• DL & property base
• Repayment track base & Commercial vehicle base
• Turnover & Property base

2. CIBIL:

Credit information bureau of India ltd it is the most popular of four credit information companies licensed by the reserve bank of India. There are three other companies also licensed by the RBI to function as credit information companies.it is a 3-digit numeric summary of your credit history, rating & report & ranges from 300 to 900 the closer your score is to 900, the better your credit rating is. TransUnion cibil collects monthly data from financial institutions with regards to your loans & credit card payments. On the basis of the information provided, CIBIL will generate your credit report & credit score which is then used by lenders to determine your financial health.

3. Fleet list: Fleet list means customers' fleet RC details except for proposed vehicles its shows the strength of the customer. It shows details of repurchase schemes & refinances scheme like,

•  Refinance scheme = customer-owned RC details in this not have another person RC.
• Repurchase scheme = except proposed vehicle remaining customer-owned RC details. in this scheme has another person RC.

4. Group exposure: Group exposure means it is an existing customer track record showing group.it searches through RC no., loan contract no. it shows a particular customer loans details how many times they borrowed loan from our finance. It shows all details about a loan with reference details, track status & track grade, etc

5. RTR (Repayment Track Record) /SOA (Statement of Account): Repayment track record means existing customer repayment track record. In this RTR we know easily whether the customer is good OR bad & we know track status with grade. If we have other finance RTR track validation process to know track status with grade. This repayment track record includes:

• Name of the client.
• Name of the co-applicant.
• Name of the guarantor.
• Name of the financer.
• Asset financed (financed vehicle)
• Repayment mode
• Vehicle No.
• Total finance amount.
• Track status with grade (GTR/ETR/ATR/PTR)
• Track status (contract is Live OR Terminated)
• Contract value (EMI amount x tenure)
• Contract No. Or Agreement No.
• Loan start date & end date
• No. of installments OR tenure OR EMI’s
• Balance EMI’s
• The total amount paid.

6. Valuation report: The valuation report is mandatory for a used vehicle loan because we are providing loans to already customers using a vehicle so necessary to do a vehicle inspection. The vehicle inspection person saw & prepare a valuation report. This valuation report includes:

• Name of the vehicle owner
• Name of the vehicle No./vehicle model/chassis no./engine no.
• Valuation amount
• Auto inspect rating
• Manufacturing date &registration date
• Verified stamp with verifier signature & date.
• Valuation report show grade of vehicle (GOOD/EXCELLENT/BAD)
• This report shows the load body details of the vehicle.
• This report shows vehicle cabin details.
• This report shows systems & functions details. (battery/diesel pump/engine, Etc
• This report shows vehicle condition & documents details.
• These are all-vehicle details shown with that particular vehicle’s photos.
• Valuation amount grater then to grid amount & grid amount grater then to finance amount.

7. RC (Registration Certificate): RC means (Registration certificate) it includes vehicle details with RC owner name & it is also one of the KYC documents. This RC includes:

• Vehicle ownership name
• RC No. OR vehicle No.
• Engine No/Chassis no.
• Vehicle registration date.
• Vehicle model
• Fuel details
• RC owner address
• Class details
• Color /CC/Body details
• Manufacture company name OR maker name
• Manufacturing date & year
• No. of times ownership transferred details.
• Name of the RTO
• Latest RC’s are shown hypothecation name (Financed bank/NBFC name)

This all details we know in RC same details we can see in vahan application app.

8. DL (Driving License):

This is also one of the KYC of the India & it’s only for provide state government vehicle driving learnt person. 

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