Business concept about Chattel Mortgage with phrase on the sheet.

For several Australian businesses and individuals, chattel mortgage is one of the excellent ways to finance business equipment, particularly a vehicle. After all, looking for a vehicle finance option for your business can be a tedious process, considering the long list of business matters you need to do for your organization.  

With various mortgage lenders in the market today, choosing the right one takes time and effort. For instance, you may have to compare chattel mortgage rates to find the right loan option that suits your business’s financial needs. Aside from the rates, there are other things that you should get familiar with if you want to apply for chattel mortgage in Australia.  

Keep reading this article to learn what is chattel mortgage and how to apply for it in Australia.  

Understanding Chattel Mortgage 

Chattel mortgage refers to a commercial finance product utilized by individuals to purchase equipment, particularly a vehicle, which will be predominantly used for business purposes. The said asset will then be treated as collateral. Once the lenders provide the funds to buy the business equipment, they’ll register their financial interest in the asset for the entire loan duration on the Personal Property Securities Register.  

On the contrary, with chattel mortgage, the borrower or mortgagor becomes the vehicle’s owner immediately. But the mortgage will be cleared upon full payment of the loan. If they fail to repay the loan, the lender can seize the equipment and claim ownership.  

Benefits Of Chattel Mortgage 

You can better understand how chattel mortgage works in Australia by learning its benefits to individuals and companies who use equipment like a vehicle for business. Generally, chattel mortgage can be beneficial in the following ways: 

  • Potentially Lower Interest Rates: Typically, the interest rates of chattel mortgages in Australia can be lower than unsecured loans. This is because the lender secures the asset involved with the mortgage. In most cases, banks and other lending institutions offer approximately 4% to 6% interest rates for a chattel mortgage. This is much lower than the 8% to 9% per annum provided by an average car finance lender in Australia.  
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However, lenders offer different interest rates for chattel mortgages, depending on the type of vehicle you want to purchase, your credit score, and other related factors.  

  • Tax Benefits: If you get chattel mortgage to purchase a car intended for business, then you can be eligible for tax deductions. For example, you can claim deductions for the vehicle’s depreciation and the interest on your loan repayments. 

You can also claim back the goods and service tax (GST) paid during the initial purchase of the vehicle. With these tax benefits in place, you can save money in the long run while allowing you to buy a car for your business.  

  • Flexible Repayments: Chattel mortgages in Australia offer repayment flexibility to businesses wanting to get a loan. Most lenders have flexible repayment structures that suit their borrowers’ needs. 

For instance, you can reduce your monthly repayments by choosing to pay larger than usual at the end of the loan term. Depending on your lender’s repayment terms, you can also take advantage of longer terms for more affordable monthly repayment. 

  • Minimal Capital Outlay: Getting chattel mortgage allows you to make the most out of minimal capital outlay. It refers to the amount spent to buy, maintain, and repair an asset like a vehicle. With chattel mortgage, you can reduce the capital outlay since many of these expenses are already covered in the loan agreement.  

If you want to take maximize these benefits, shop around to make an informed financial decision for the growth and success of your business.  

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Getting Chattel Mortgage In Australia 

Now that you’re aware of the benefits of chattel mortgage, it’s time to familiarize yourself with the steps in getting it in Australia. These include: 

  • Check If You Qualify For The Eligibility Requirements  

Before getting a chattel mortgage, you need to check the eligibility requirements and determine if you meet them. There’s a chance you may be ineligible to apply for the financial product.  

While the qualifications may differ from one lender to another, the following are considered the general requirements to meet to become eligible for the chattel mortgage: 

  • Identification card 
  • Registration for GST 
  • Valid Australian business number 
  • Bank statements of your business and other relevant financial records 

Aside from the ones mentioned, having a good credit score and history is essential to improving your chances of obtaining approval from the lender. Make sure to check your credit report before submitting your loan application.  

  • Pick The Asset You Want To Get  

If you’re qualified to take out a chattel mortgage, you should choose the asset you want to purchase next. In most cases, chattel mortgage is used to finance a business equipment purchase, such as a vehicle used predominantly for business operations. 

Ensure you obtain essential details about the asset you’re buying since they’re crucial when applying for a mortgage. Some key elements include the model name and the asset’s market value.  

  • Apply For A Chattel Mortgage 

After choosing an asset, you can now fill out a loan application form from the lender. Make sure to find a reputable lender that offers chattel mortgages. You can work with either a banking institution or an independent lender for your mortgage application.  


Once you submit your application, the lender will review and verify your documents before making a decision. Depending on your lender, the approval period may take a few hours to some days. When a decision becomes available, a representative will call or email you to inform you about the result and the following steps to complete the loan application process.  


In Australia, chattel mortgages are used to purchase business equipment like a vehicle. But like other financing options, there are specific considerations to take to get the most out of your loan. Therefore, if you’re planning to get a chattel mortgage anytime soon, keep the above information in mind. That way, you’ll know what to do and where to start to ensure a successful application.  



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