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Chattel mortgage

A chattel mortgage is a loan for vehicles or equipment which are used as part of a business.

A chattel mortgage works in a similar way to a secured loan – you borrow the money to buy the asset (ie a car) and then you use the asset (broom broom) as a guarantee. What sets it apart, however, is that it’s only for assets that are used for business.

Make sense? Not quite?

Ok, let’s say you’re a tradie and need a ute to carry your equipment and materials from site to site every day. Or maybe you operate one of those vans that drives around with green sleeves blaring from the speakers offering kids (and adults!) icecream… Those are examples of vehicles used to support a business and which may qualify for a chattel mortgage.

Before applying for a chattel mortgage, however, we do advise checking in with a trusted accountant to make sure it’s a suitable option for your business.

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Fixed or variable interest rates

We check with our trusted lenders for the best fixed or variable-interest-rate deals for you.

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Flexible repayments

You get more control over your car loan repayments, being able to pay it off faster if you choose and save money on interest rates.

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Expert support

At CarMoney, our Ninjas work to find the right solution for you. We can help with everything from the loan to sourcing the vehicle if you are yet to find one.

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So, what are the benefits of choosing a chattel mortgage over, say, a different kind of car loan?

Well, when it comes to chattel mortgages;

  • Repayments can be structured over a range of terms – usually 2 to 5 years
  • Interest rates are usually lower than unsecured loans and can be fixed or variable
  • Repayments can be fixed at the same amount each month or can be structured to fit your seasonal cash flow requirements (fixed rate)
  • You own the financed asset up-front, so it appears as an asset on your balance sheet, as well as the finance showing as a liability
  • A balloon or residual payment can be set at the end of the term to lower your monthly payments.

Want to compare repayments? Check out our chattel mortgage calculator! It’s like a magic eight ball for loan options – it has all the answers if you know what to ask it…

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FAQs

A chattel mortgage is a secured loan for vehicles or equipment for business use.

A chattel mortgage works similarly to a secured loan, borrowing the money to buy the asset, using the asset as a guarantee. Unlike a secured loan, a chattel mortgage is only for assets that are for business use.

  • Repayments can be structured over a range of terms – usually 2 to 5 years.
  • Interest rates are usually lower than unsecured loans and can be fixed or variable.
  • Repayments can be fixed at the same amount each month or can be structured to fit your seasonal cash flow requirements (fixed rate).
  • You own the financed asset up-front, so it appears as an asset on your balance sheet as well as the finance showing as a liability.
  • A balloon or residual payment can be set at the end of the term to lower your monthly payments.

Before applying for a chattel mortgage, we advise checking it’s suitability for your business with a trusted accountant.

Get A Quote

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