Loans for Taxi Drivers

The recent years have seen a boom in the taxi market on account of which different types of taxis have come up. The popularity of taxi companies such as Uber and Ola have led to the mini vehicle boom as well. The demand for taxis have been increasing and many cab companies hire drivers throughout the year to cater to this rise in demand. Traveling, especially in cities with high traffic has become relatively hassle-free due to the availability of taxi services.

In lieu of this, car companies are also offering deals for drivers looking to purchase cars for the purpose of offering taxi services. Banks and financial institutions are offering auto loans specifically designed for purchasing vehicles for taxi services.

Here are some popular auto loans, especially meant for taxi drivers:

Oriental Bank of Commerce – Oriental Scheme for Financing Autos/ Taxis/ Small Cargo Vehicles

• This loan is meant for the purchase of 4 wheeler vehicles/autos/small cargo vehicles for commercial use.
• Loan amount – 85% of the On Road price. You can obtain up to Rs.10 lakhs per vehicle and an aggregate of up to Rs.50 lakhs.
• Individuals and companies including sole proprietorships, partnerships, and public limited and private limited businesses are eligible to apply for this loan.
• A valid driver’s license with at least 3 years of experience is required to apply for this loan.
• Up to 10 vehicles can be purchased per entity.
• Hypothecation of the vehicle must be done through this loan.
• Security – No collateral requirement for loan amount up to Rs.5 lakhs. For loan amount between Rs.5 lakhs and Rs.10 lakhs, 50% tangible collateral is required. For loan amount above Rs.10 lakhs, 100% tangible collateral is required.
• Margin – 15% margin will be applicable on the On Road price.
• Repayment Period – 60 months which includes a 3 month moratorium period.

Punjab & Sind Bank – Commercial Vehicle Scheme

• This loan is applicable to individuals, proprietorships, partnerships, limited companies, associations, trusts, societies etc. proposing to own a transport vehicle.
• Loan quantum – The maximum loan quantum for new business entities is Rs.50 lakhs and Rs.2 crore for existing business entities.
• Margin – 15% margin on the project cost (includes vehicle cost, registration charges, road tax etc.) will be applicable.
• Hypothecation of the vehicle must be done through this loan.
• Security – No collateral is required for loan amount up to Rs.2 lakhs. 100% collateral will be required for loan amount above Rs.2 lakhs, excluding vehicles covered under the CGTMSE.
• Repayment – The maximum repayment tenure is 5 years with a moratorium period of 3 months. Balloon instalment payment option is available.

Kotak Mahindra Bank – Unnati Auto Finance

• This loan is applicable for the purchase/refinance of new/used taxis, MUVs and SUVs.
• You can also avail this loan for the purchase of second hand trucks and used construction machinery/equipment.
• First time drivers must have at least 2 years of driving experience in the transport related business.
• The bank offers flexible repayment tenures and quick processing of the loan.
• You can pay your EMIs conveniently by making use of the bank’s wide network of collection centers.

Punjab National Bank (MSME Banking) – Scheme for Advances to Owner-Drivers of Taxi Cars, Three Wheeler, Station Wagons, Tempos etc.

• You can avail this loan for purchasing a new or an old vehicle not older than 3 years for commercial use.
• Margin – For new vehicles, no margin will be applicable for a loan amount up to Rs.25,000 and 10% margin will be applicable for a loan amount above Rs.25,000. A margin of 25% will be applicable for the purchase of old vehicles.
• Security – Hypothecation of the vehicle to be done to the bank as security wherein, the names of the bank and borrower will be registered with the Motor Vehicles Authority.
• Collateral – No collateral security requirement for loan amount up to Rs.10 lakhs if the loan is covered under the CGTMSE. Collateral will be required for loan amount above Rs.10 lakhs.
• Repayment – Up to 60 months for taxi cars through monthly instalments. The repayments will commence from the day the vehicle starts operating commercially or 2 months from the advance date, depending on whichever occurs first.
• Insurance – You must insure the purchased vehicle which should include civil commotion & riots.

Due to the ever increasing demand for taxis in India seen in the recent past, there is no dearth of specialized loans for taxi drivers.