Paying tolls can be a significant expense for transport operators and commercial vehicle owners who frequently travel on toll roads. To ease this financial burden, some financial institutions offer customised loans specifically meant for paying toll expenses. Let’s explore all about toll finance, which will help you to make an informed decision about whether toll finance is the best option or not.

What is Toll Finance?

Toll finance refers to a type of working capital loan offered by financial institutions like Shriram Finance. It helps transport businesses, commercial vehicle owners, and frequent toll users easily manage and pay their toll expenses.

Instead of paying toll charges in cash every time, the loan amount sanctioned under toll finance can be utilised to recharge prepaid toll tags like FASTags. FASTags are prepaid Radio Frequency Identification (RFID) tags mandated by the National Highways Authority of India (NHAI) for electronic toll collection on national highways. Toll financing provides fleet owners access to capital to sufficiently pre-load FASTags and repay equated monthly instalments (EMIs) over a specific tenure.

Benefits of Availing Toll Finance

Toll finance offers significant benefits to transport businesses by ensuring smooth cash flow, better financial management, and cost efficiency. Here’s how it can help:

• Ensure Steady Cash Flow: Paying tolls in cash for every trip can tie up working capital, leading to financial strain. With toll finance, businesses have assured funds dedicated to toll payments, preventing liquidity issues and ensuring smooth operations.
• Enhance Financial Planning: Instead of setting aside cash reserves for toll expenses, businesses can integrate fixed equated monthly instalments (EMIs) into their financial plans. This allows for better budgeting, cost predictability, and improved resource allocation.
• Optimise Travel Efficiency: Cash toll payments often lead to long queues, causing delays and inefficiencies. Toll finance supports prepaid tags, which are scanned instantly, reducing waiting times and improving fleet turnaround. This efficiency can lead to increased trip frequencies and higher profitability.
• Lower Financing Costs: Many financial institutions offer toll finance at competitive interest rates, making it a more affordable financing option compared to other short-term credit facilities. This helps businesses reduce overall operational costs.
• Avail Tax Benefits: The interest paid on toll finance is tax-deductible, reducing taxable income and ultimately lowering the company’s tax liability. This financial advantage makes toll finance an even more attractive option for transport businesses looking to optimise expenses.

Key Features of Toll Road Funding

Following are some of the key features of toll finance which help businesses to save money in the long run without interrupting their regular business operations:

• Competitive Interest Rates: Banks or Non-banking Financial Companies (NBFCs) offer customised interest rates typically starting from 15% per annum. These rates are quite competitive and are subject to change based on lending institutions’s policies, your credit profile, and other eligibility criteria.
• Quick Processing: Loan providers offer faster loan approval with minimal eligibility checks and documentation. Disbursals also happen quickly, as per the loan providers' policies.
• Flexible Tenures: One can choose a convenient repayment tenure of up to 12 months.
• Online Application: The entire application process happens online, from registration to uploading documents.
• FASTag Recharge Facility: The sanctioned loan amount can be utilised to instantly recharge FASTags.

Eligibility Criteria

Below are the typical eligibility criteria to apply for toll finance:

• Nature of Business: Transport operators and commercial vehicle owners from all business types can apply.
• Age: The applicant's age range can be between 18 and 60 years at loan maturity.
• Business Stability: The transport business should have been operational for a minimum of around 3 years. This criterion can be different for some financial institutions.
• Income: The applicant should have a stable monthly income to repay the EMIs, which vary from one loan provider to another.

Disclaimer: Eligibility criteria may vary based on the lender’s policies and are subject to change. Applicants are advised to check with the respective financial institution for the most updated requirements.

Documents Required

Here are some of the basic documents usually required if you have made up your mind to apply for toll finance:

• Identity Proof: PAN Card or Form 60 along with Aadhaar Card / Voter ID / Passport / Driving License
• Address Proof: Aadhaar Card / Passport / Driving Licence / Electricity Bill etc
• Income Proof: Last 3 months Bank Statements / Income Tax Returns / Salary Slips / Company Financials
• Latest Photograph

How to Apply for Toll Finance

One can apply for toll finance online by following the simple steps, but it varies depending upon the financial institution's policies:

• Registration: Visit the financial institution's website and register using a mobile number.
• OTP Verification: A one-time password (OTP) may be sent for verification. Enter OTP to proceed, but this step varies.
• Application Form: Fill out the online application form with all required personal details accurately.
• Documents Upload: Upload scans of necessary documents as per the checklist.
• Representative Call: A bank or NBFC representative may call you to discuss the application and loan details.

Conclusion

Paying for toll expenses through loans instead of cash allows transporters and travellers to better plan budgets and leverage tax benefits. The application process is quick, and the eligibility criteria are not too strict. With features like competitive interest rates, flexible tenures and FASTag recharge, toll finance removes the hassle of paying tolls during transit. It improves efficiency and saves costs for transport companies. Those who frequently travel on toll roads should consider applying for toll finance from trusted financial institutions.

FAQs

1. What types of vehicles are typically covered by toll financing (cars, trucks, etc.)?

Toll financing generally covers commercial vehicles such as trucks, buses, and freight carriers. These vehicles frequently travel on toll roads and can benefit from financing options that help manage their recurring toll expenses. Personal vehicles are usually not covered under such financing programs.

2. Does toll financing cover prepaid tolls or only pay-as-you-go tolls?

Toll financing typically covers pay-as-you-go tolls rather than prepaid tolls. This is because toll financing helps businesses manage immediate toll expenses during travel. However, some programs may also offer solutions for FASTag recharge, which can be used for both prepaid and pay-as-you-go tolls.

3. Can I finance tolls for personal and commercial vehicles with the same program?

Toll financing programs are generally designed for commercial vehicles. These programs cater to businesses that regularly deal with tolls. Personal vehicles usually do not qualify for toll financing, as the focus is on assisting businesses with the recurring costs associated with freight and transport operations.

4. What are the typical fees associated with toll financing in addition to interest?

In addition to interest rates, toll financing may include small processing or administrative fees. These fees are typically associated with loan approval, document handling, and disbursal. The exact fees depend on the financing provider and the loan agreement, so it’s important to review all terms before applying.

5. How long is the repayment period for toll financing?

Repayment periods for toll financing typically range up to 12 months. This flexibility allows businesses to pay off their toll expenses in manageable instalments based on their cash flow and financial stability, ensuring minimal impact on their daily operations.