A Chattel Mortgage is a loan agreement whereby the financier advances you a loan for the purpose of purchasing a car or any other type of vehicle, business equipment or other goods. Under a Chattel Mortgage Loan Agreement, the customer takes ownership of the purchased equipment at the time of delivery. The financier is then able to take a ‘mortgage’ over the equipment to secure the loan and registering their interest in the equipment for the entire duration of the agreement by registering a charge over the goods. Once the loan contract is completed, the financier’s security interest is removed and the customer can enjoy a clear title over the car or business equipment.
CHATTEL MORTGAGE LOAN PROCESS
- You decided on the vehicle or equipment you wish to purchase.
- You negotiate the cost of the equipment.
- You select the term of the loan contract – between 1 and 5 years – and the frequency of the loan payments.
- Once approved, you can take delivery of the equipment as the ‘Owner’.
- At the same time, the Financier registers the mortgage over the goods as security.
- At the completion of the contract, the security mortgage registration is lifted and you hold a clear title over the equipment.
- You hold the title to the goods.
- 100% finance can be provided.
- Repayment schedules are flexible and can be structured to suite your needs.
- Balloon payments at the end of the term can be arranged.
- A Chattel Mortgage may provide tax benefits if the financed goods produce taxable income.
- The term of the Chattel Mortgage is flexible – maximum term 60 months.
- Interest Rates are fixed for the entire term of the loan.
- You are owner the goods immediately on delivery.
- You can obtain the goods for a minimal capital outlay.
- You can match repayments to cash-flows.
- You can pay lower instalments during the term of the contract with a balloon payment at the end.
- Repayments may be made in advance.
GST & CHATTEL MORTGAGE LOANS
Whether you are on a “cash” or “accrual” method for GST, with a Chattel Mortgage you can claim the full amount of GST on your B.A.S. Statement. You can then use the GST refund to reduce your monthly instalments.
FEE & CHARGES
All fees and charges of Chattel Mortgage Loans are known and listed in advance. Fees and charges include:
- Establishment fees are payable with no applicable GST.
- An ASIC fee is applicable for companies (varies between states).
- Stamp duty is payable on amount financed.
- State government charges apply.
Chattel Mortgage Loans offers flexible repayment options including monthly, quarterly, semi annually and seasonal.