What Asset Finance and Chattel Mortgages are
For the average person using finance to buy a car or any other household consumer product means diving into the world of Asset Finance. The concepts and terms can seem confusing, but it doesn’t have to be that way. Today we’re going to give you an introduction to Asset Finance and some of the main financing options.
Asset Finance is a broad term often used to explain the range of financing options available when aquiring consumer products such as vehicles, boats, caravans, machinery, office equipment and household items like TV’s and computers. Under the term Asset Finance there are a number of actual financing options such as Chattel Mortgages, Finance Leases, and Personal Loans etc.
This is a popular method of financing vehicle purchases (new and used) and a range of other equipment and machinery assets. Under this arrangement, you have possession and use of the asset in return for making the regular payments to the lender. The lender (bank etc) takes a ‘security’, (mortgage) over the asset in exchange for providing the loan funds. By way of comparison, it’s like a home loan and mortgage where the lender may repossess the asset if you don’t make the repayments. The loan in finalised once the final payment has been made. There are a range of features and benefits relating to this finance option including balloon payments, loan terms and potential tax benefits. Like any finance option you need to determine if it’s suitable for your circumstances.