Learning More about Chattel Mortgage

You might have heard of chattel mortgage before as it is one of the loan options for car financing, especially for car leasing in Melbourne or in any part of Australia. Car buyers opt for chattel mortgage when they are a bit short on the amount they have to pay to own the car, or when they choose not to pay lump sum cash.

Financing Option: Chattel Mortgage

Chattel mortgage is basically mortgage for anything other than real estate or items connected to real estate. It's derived from the French word "chatel," which has evolved over the years from the Latin word "caput," meaning "head." Vehicles are one of the most common items acquired through chattel mortgage.

It works the same way as a consumer car loan, save for a few differences. First, it's a business use loan, meaning a vehicle purchased under chattel mortgage must be used for business at least 50 percent of the time. Second, chattel mortgage rates are usually lower than those of regular car loans.