What Are Current Semi-truck Financing Interest Rates?

Photography by Getty Images; Illustration by Bankrate

A new or used semi truck can cost upwards of $100,000 or more and require a down payment of 10 to 20 percent. For many small businesses, the high cost of a new or used semi truck makes financing the most viable way to get a rig to start or grow your business.

There are multiple types of semi truck financing to choose from. Each type has different fees and costs to consider. Finding the right loan and the most competitive commercial vehicle loan interest rate could save you thousands of dollars over the life of the loan.

It helps to get an idea of the current semi truck financing rates for different loan types to help you choose the best option for your small business.

Commercial truck loan rates by type

The interest rates you land for a commercial truck loan vary depending on the type of business loan you use. Here are the current commercial truck loan interest rates across different loans.

Factors that influence commercial truck financing rates

Interest rates from semi-truck financing have a wide range based on these factors:

• Credit score. Your credit history is vital for lenders setting interest rates. A good credit score of 670+ can lead to lower interest rates, like 6 percent or 7 percent. Bad credit scores can mean rates as high as 99 percent or more.
• Type of loan. The loan you choose influences the rates you’ll pay. Business lines of credit and equipment loans offer some of the lowest rates, often landing between 6 percent and 35 percent.
• Down payment. Semi truck loan down payments are usually between 10 and 20 percent, but you might get a lower interest rate and better financing terms if you put down a larger deposit.
• Age of the semi truck. Older trucks are usually cheaper and can make coming up with the down payment easier, but you may have fewer lending options for a used truck than a new semi truck.
• CDL experience. Driving a semi truck requires a commercial driver’s license (CDL). The longer you’ve had a CDL, the easier it may be to secure a commercial vehicle loan.
• Secured or unsecured loan. There is less risk for the lender if you secure your loan with an asset. That’s why lenders offer lower rates for secured loans versus unsecured loans. Many semi truck loans are secured by the truck itself.

Additional fees

Some loans include fees outside of the interest you pay, such as:

• Origination fees, costing 1 percent to 4 percent of the loan amount
• Fixed closing or documentation fees, such as $150
• SBA guarantee fees from 0 percent to 3.75 percent of SBA-guaranteed loan portion

How to compare semi-truck loans

Before you finance a semi truck, you’ll want to look at several loan features to figure out if it’s right for you. Those include:

• Interest or factor rate. Consider prequalifying for several commercial truck loans to find the lowest interest rate. If a lender charges a factor rate instead of interest, you could end up paying more than a conventional loan. You’d need to change the factor rate into an interest rate to compare and remember to add other loan fees into your final costs.
• Type of lender. Traditional banks tend to offer the best rates and repayment terms, but they also have the strictest eligibility. Online lenders can provide fast funding, while direct lenders specializing in semi-truck loans might accept poor credit or higher-mileage trucks.
• Eligible trucks. Semi-truck financing requirements may include age or mileage restrictions on the truck you can buy, such as 10 years old or 650,000 miles. Lenders want to make sure it’s a roadworthy investment that will outlive the loan term.
• Repayment terms. Check the repayment terms offered by different lenders. Most lenders go up to five years for semi-truck financing. But some offer longer terms of seven years or more.

How to choose a semi-truck lender

Selecting a semi-truck lender depends on factors like how much you can put down, your credit score, your business’s financial profile and your goals for the truck. Here are some steps to take to find the best semi truck lender.

Check your business and personal credit

Lenders consider your business credit when determining whether to approve a loan and what rate to offer. If the loan requires a personal guarantee, your personal credit score may also be a factor. Check both credit scores to ensure your credit profile is accurate, allowing time to correct any errors and ensuring you know where you stand so you can focus on lenders who are more likely to approve your application.

Compare semi-truck lenders

Lender requirements, loan terms and interest rates vary, so it’s worth comparing several lenders and loan types to determine which offers the best financing for your needs. Pay attention to the details of each loan, including fees, loan amounts and interest rates.

You can use Bankrate’s business loan calculator to help you determine how much you can afford. Consider our lender picks for the best semi-truck loans to help you narrow down your choices.

Consider getting preapproved

Some lenders offer a preapproval, which can help you determine how much you can qualify for and your interest rate and loan term. Preapproval can also help you assess your chances of qualifying before you fill out the loan application.

Apply for a semi truck loan

You’ll complete the loan application once you find the lender that meets your financing needs and budget. Gather your personal and business financial documents and complete the application to secure funding. Document requirements vary, but be prepared to provide recent bank statements, tax returns and profit and loss statements. You’ll also need details about the semi truck, such as the year, make, model, VIN, purchase price and mileage.

Bottom line

There are plenty of options to help you get semi-truck financing. Since interest rates play a significant role in the total borrowing costs, you want to keep the average rates of 6 percent to 35 percent in mind when shopping around for the right commercial truck loan. Ultimately, the rate you’re offered will depend on factors like your credit, the type of loan and the lender you choose.

Frequently asked questions

• What is a good interest rate for a semi-truck loan?
  

  Semi-truck loan interest rates go as low as 5 percent to 6 percent for the most creditworthy business owners. Anything less than 10 percent could be considered a good rate. Businesses should compare lenders to find the lowest rate available to them.

• How much is a down payment on a semi-truck loan?
  

  Many semi-truck loans require a down payment of 10 percent to 20 percent. Some direct lenders offer financing without a down payment if you don’t have any capital on hand.

• What would the loan payments be on a $150,000 semi truck?
  

  If you finance a $150,000 semi truck for five years with a 6 percent APR, your payment would be about $2,900 per month. The same loan would cost you $3,337 monthly with a 12 percent interest rate. Loan repayments are calculated based on your interest rate and exact repayment term.