In the past few years, professional loans have become one of the mainstream borrowing options that individuals like doctors, engineers and CAs depend on to expand their business ventures. With the inclusion of personal funding in the professional loan meaning and scope, availing of financing for expenses like higher studies of children, marriage and travel has also become convenient.
Thanks to the easy availability of these advances against minimum eligibility requirements and simple online application procedure, availing of a professional loan is just a few clicks away. Nevertheless, professionals must also be wary of a few essential factors before availing the advance to ensure an informed borrowing decision.
Essential considerations to make for professional loan financing
1. Types of loans available
Based on various types of professionals, either running their self-established practice or providing services under employment, lenders provide dedicated professional loans. Some of the common examples of these advances include loans for doctors, engineers, chartered accountants, and the like. However, the professional loan meaning also permeates through the utility-based financing categories as under-
- Personal loans for professionals
Professional loans are advances dedicated to fulfilling the personal financing needs of doctors, engineers, CAs or any other qualified professional. Reputed lenders provide high-value personal loans for professionals without end-use restrictions, allowing multiple uses.
- Business loans for professionals
A business loan for a CA, engineer or any other professional meets personalised funding needs related to practice growth and expansion of concerned professionals. For instance, if you are a doctor and looking how to open your own hospital or expand one, a loan for doctors can be your go-to funding option.
- Loans against property for professionals
These are high-quantum advances lenders provide against residential or commercial property mortgage, allowing professionals to meet their big-ticket financing needs conveniently.
2. Financing quantum
With the above indication on the types of professional loans available, eligible candidates can safely secure financing of up to Rs.42 lakh as personal as well as business loans. For secured advances like loans against property, the financing quantum can go up to Rs.50 lakh.
3. Credit score and history requirements
Although the professional loan meaning comprises both secured and unsecured advances, the relevance of credit score remains steadfast. Before proceeding to apply for your desired professional loan, it is thus critical that you consider checking your credit score, whereby the ideal score stands at 750. It is also best to go through the credit history, which indicates your overall creditworthiness, and take necessary steps that should help improve the score before applying.
4. Interest rates and other charges applicable
Out of various reasons to take a business loan for doctors, or for that matter any other loan for professionals, an affordable rate of interest should be the top priority. It is best to run a market comparison and check available rates by different lenders to narrow down the most affordable professional financing option. Also, make sure to consider other charges that considerably impact the repayment liability too before finalising.
5. Repayment capacity and EMI estimation
A prospective borrower, be it a professional or non-professional, must assess his/her financial standing and repayment capacity before finalising the loan amount and tenor.
In the case of professional loans, as the financing quantum is usually high, EMI and repayment capacity assessment are more important. Therefore, use dedicated financial tools like a personal loan or business loan EMI calculators provided reputed lenders for free to better decide on a suitable loan amount and tenor for your professional loan.
These lending institutions also bring along pre-approved offers that make financing quick and convenient. You can seek these offers on a range of financial products, including business loans, personal loans, and loans against property. Provide only your name and contact details to check your pre-approved offer.
Make sure to go through the customized loan features and benefits to better understand the professional loan meaning and choose an advance accordingly. Make sure to check for features like balance transfer facility, flexi loan facility, and the likes for convenient repayment and improved management of finances. Consequently, collect what information you need to apply for a business loan, personal loan or any other professional loan, and proceed.
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One can also consider additional features such as easy balance transfer facility to ensure a reasonable borrowing decision that helps fulfill the necessary funding needs while keeping the finances affordable.