What are the typical interest rates for business two-wheeler loans?

Several factors influence interest rates on two-wheeler loans for business purposes. However, the interest rate is typically between 8% and 30% annually.

• Type of Loan Provider: Interest rates vary depending on whether loans are taken from banks, Non-banking Financial Companies (NBFCs), or financial institutions.
• Credit Score: Applicants with higher credit scores, such as those above 750, are generally perceived as having strong credit behaviour, which may influence the terms offered for business two-wheeler loans, including interest rates. Conversely, lower scores, such as those below 700, might lead to different loan terms. Ultimately, the final conditions are determined by the financial institution's specific policies and assessment criteria.
• Loan Amount: Lower loan amounts may be costlier on a percentage basis. On the other hand, higher loan amounts can sometimes qualify for lower interest rates.
• Tenure: Loan repayment tenures of 4-5 years generally result in a higher total interest outgo than shorter tenures of 12-18 months.

Applicants should analyse business cash flows, revenues, and existing debt commitments before finalising loan amounts and tenures.