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Commercial Truck Financing: Good Credit vs. Bad Credit

Whether you are a commercial trucker with good credit or bad, follow our guide to unlock the best financing options for commercial vehicle loans and leases.

Sarah Klein
Sarah Klein
October 16, 2020

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Commercial trucks are fast becoming the chosen mode for end-to-end transportation of goods. Getting commercial truck financing is a viable option for buying your first truck or adding one to your existing fleet. The primary benefit of using funding is that you don’t have to use your savings to make the entire payment in one go.

 Like any other loan, you may be required to pay back the commercial vehicle loan in monthly or weekly installments. The commercial truck loan length may vary depending on your ability to pay it back. The rate of interest and amount of down payment may also vary depending on other factors in your application.  Our readers report that Capital One Semi Truck Financing offers great rates and flexible programs.

How Does Credit Score Impact Your Loan Length?

The best rates and terms are usually offered to financially responsible borrowers with strong credit histories. Small businesses or start-ups with little or no credit history may find themselves in a tricky situation in this regard. As would someone with a bad credit score, tax liens, vehicle repossessions, or delinquencies on their credit report.

Fortunately, credit scores determine rates and not whether you qualify. A low personal or business credit score will not exempt you from qualifying for a loan. It may however, lead to a more complicated application process and affect certain terms of the loan.

Regardless of your credit score, if you need commercial truck financing, there are ways to get it. Read on to know how your credit score affects your commercial truck financing.

Financing Options

Traditional sources like banks, as well as alternative lending companies and online lenders, offer commercial truck financing. You may seek funding from any of these, depending on the terms most agreeable to you.

With a good credit score, you can take your pick and choose any lender that offers you the best deal. It gives you an advantage in terms of negotiating aspects such as the commercial truck loan length and interest rates. 

Bad credit will make it difficult to find traditional lenders willing to offer you financing for your commercial vehicle. It will also limit your options when it comes to negotiating, and will have to adhere to more rigid terms.

Alternative lending companies offer the quickest solution with simplified application processes requiring less documentation than traditional sources. However, they may charge a high application fee or down payment.

In addition to a higher down payment and higher interest rates, it also shortens the commercial truck loan length. That is, you will have to pay back the loan at higher rates within a shorter period. 

Down Payment

When applying for commercial truck financing, one of the basic requirements is paying a part of the truck's price upfront. How much exactly will depend majorly on your credit score.

A higher credit score reflects well on your application and portrays you and your company as a good investment. Therefore, lenders are more likely to cover a larger percentage of the cost. While you will only have to pay a small fraction of it as a down payment.

If, however, you are struggling with bad credit, you may be able to offset it with a higher down payment. Some companies may even offer financing with no down payments and no credit checks but at substantially higher interest rates.


Besides your credit history, the commercial truck loan length depends on several factors that can affect your ability to repay it.  

Owning an established business running successfully and having a good credit history gives you an edge. It provides assurance to lenders about your payment capabilities. This will ultimately help you get a longer period over which you can stretch smaller amounts of payments.

With bad credit or no credit in the case of new businesses, you will have to provide more assurance. Lenders may offer you comparatively shorter commercial truck loan length with higher valued installments. Proving that you have a strong customer base may help in this regard. Payment terms may also be more stringent with stricter deadlines.

Interest Rates

Your credit score and credit history are the deciding factors when it comes to interest rates. The higher your score, the lower the interest rate.

With experts minutely examining your financial history, good credit will help you get the finance you need at lower interest rates. Lenders need to know how financially responsible you are. If you have a good credit report with no negative events, you will easily qualify for a low-interest loan.

If you want to qualify for a loan with bad credit, you will have to pay a higher rate of interest.

Derogatory marks such as tax liens, vehicle repossessions, or delinquencies on your credit report have a negative impact. However, providing a substantial down payment and agreeing to higher rates of interest will help you secure the financing you need.


With good credit, financers already see you as a viable risk, the only collateral required is the truck itself. Typically, the lender holds the title of your truck till the end of the commercial truck loan length. You will have full ownership of it once the loaned amount is paid back, with interest, within the stipulated period. 

If you have a low credit score, you are a riskier investment and may be required to provide additional collateral in certain cases or sign a personal guarantee. Missing or stopping payments will give the lender permission to seize the vehicle in order to recover their dues. 

As you can see, good credit makes it simpler to qualify for commercial truck financing with flexible and easier terms. It allows you to qualify for low-interest rates as well as choose your commercial truck loan length.

Final Thoughts

Bad credit doesn’t exempt you from qualifying for commercial truck financing. It just means that you may have to settle for more aggressive repayment options. 

Several alternative lenders are willing to extend loans to those who are unable to meet the requirements of traditional lenders. These loans typically have a short commercial truck loan length with rigid deadlines.  

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