What is a chattel loan?

Vehicles: A chattel loan can serve to secure a loan for a car or other vehicle, typically for business purposes. This option is a more popular choice in countries with a national goods and services tax (GST) because the loan allows the vehicle’s owner to claim GST associated costs and vehicle depreciation on their taxes.

How much does a chattel mortgage cost?

According to Money borrower data, the average chattel mortgage amount requested for vehicles is $58,706 and $181,434 for machinery or equipment. This example compares how different interest rates on a chattel mortgage impact the monthly repayments on various loan amounts. The calculations are based on a five-year loan term.

Is a chattel loan better than a mortgage?

The CFPB found that chattel loans have lower loan amounts and processing fees compared to mortgage loans. However, the APR is 1.5% higher. The FHA’s requirements for chattel loan borrowers are less stringent than for traditional mortgages, which can make it easier for low-income buyers to access loans.