A chattel loan, also known as a chattel mortgage, is a type of loan contract used in some states with legal systems derived from English law. It is a loan for a movable piece of personal property, such as machinery, a vehicle, or a manufactured home, where the movable property acts as collateral for the loan. Here are some key points about chattel loans:

• Chattel loans have shorter repayment periods, lower processing fees, and lower maximum loan amounts than their conventional counterparts. They also tend to have higher APR and interest rates, which means monthly payments may be high, but the loan can be paid off faster.

• Chattel mortgages are commonly used by companies, partnerships, and sole traders to fund the purchase of cars, commercial vehicles, and other business equipment in Australia. Under Australian Taxation Office rules, businesses that account for GST on a cash basis are entitled to claim an Input Tax Credit for all of the GST contained in the purchase price of the chattel on their next Business Activity Statement.

• Chattel mortgages in England and Wales are seen as a form of security interest for lenders in certain financing scenarios. Individuals may give a chattel mortgage over their personal property, but it must be in the statutory form prescribed by the Bills of Sale Act 1878 and the Bills of Sale Act (1878) Amendment Act 1882 for it to constitute valid security. Companies and other corporate entities may also give chattel mortgages over any tangible, movable property as security for a debt obligation.

• Chattel loans can be used for various types of movable personal property, including vehicles, equipment, and manufactured homes. They are often used by borrowers who want to purchase a home that isn’t permanently attached to the land.

• Chattel loans have specific rules that vary according to the property and state or federal law. If you default on a chattel loan, the lender can take possession of your personal property, so its important to make timely and complete payments to avoid losing your home.

In summary, a chattel loan is a loan for a movable piece of personal property, such as machinery, a vehicle, or a manufactured home, where the movable property acts as collateral for the loan. Chattel loans have shorter repayment periods, lower processing fees, and lower maximum loan amounts than their conventional counterparts, but they tend to have higher APR and interest rates. They are commonly used by businesses in Australia and individuals and companies in England and Wales to fund the purchase of movable personal property.