Chattel Mortgage

  • Posted 21 Jun

Chattel Mortgage

When it comes to deciding on the right car finance option for you, it can be very confusing about which option to choose, especially if you’ve never heard of some of the terms before. One such term, called a chattel mortgage, can be confusing and misleading, as most people would associate the word ‘mortgage’ with owning property.

In the case of a car chattel mortgage, a lender will provide you with the funds to purchase a car, and you will be the owner of the car outright. The lender will then take out a mortgage over the car as the security against the loan. They must register this with ASIC; called a ‘Fixed and Floating Charge’.

This type of loan is suited to companies, sole traders, trusts, partnerships or anyone who is an ABN holder. The car must be used for business purposes for at least 50% of the time.

The rest of the loan works like a normal loan, you make payments based on a repayment schedule, interest is calculated and you can fix the term from 1-5 years. You could also have a balloon payment at the end of the contract, which would help to reduce your regular repayments.

Car Chattel Mortgage Benefits

  • Your repayments are fixed
  • Interest rates available are lower as loan is secured against the car
  • Tax benefits with regards to interest claims and depreciation
  • GST registered customers can claim the GST portion of the purchase price

Australian Credit and Finance has access to over 13 lenders in this area, so we can work with you to find the right price and deal that best suits your needs.

Contact us today to get access to chattel mortgage information and quotes.

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