What is Chattel Mortgage and how does it work?
A chattel mortgage is a secured loan designed specifically for business. It works much like a standard car loan. You take ownership of the asset upfront and use it as collateral for the loan. Once you’ve made the final repayment, you’ll own the asset outright.
Chattel mortgages are most commonly used to finance the purchase of vehicles, but they may also be used to finance the purchase of boats, tractors, trucks, motorbikes, and a variety of other movable assets. The lender will provide the funds for you to purchase the vehicle, and you will take ownership at the moment of purchase, similar to a secured car loan. In addition, the lender will take out a mortgage on the vehicle as collateral for the loan. And when the contract is completed, you will be the sole owner of the vehicle.