A Professional Loan is for self-employed individuals like chartered accountants (CAs), lawyers, and doctors. This loan can be availed without collateral and used to improve your business or buy new equipment. Taking a Professional Loan is a good way of strengthening your finances to upgrade your business. You can get a new office for yourself, expand your practice, open a new branch, and get quality equipment depending upon the market needs.
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Since this loan is collateral free, your professional experience will hold more value. The more experience you have in your field, the more you have worked and earned, and the more likely you will be to avail of a Professional Loan at a great interest rate.
If you are applying for a loan for the first time, your interest rate will differ vastly from an experienced individual. While your credit score and account statements usually decide your loan and interest rate, your work experience is also a crucial factor for a Professional Loan approval.
Let us look at the eligibility criteria and application process for securing a Professional Loan.
Eligibility Criteria
The eligibility criteria for a Professional Loan differ from lender to lender. Given below are some common criteria required by all Non-banking Financial Companies.
- The applicant should be an Indian resident.
- The minimum and maximum age limits are 25 and 65 years.
- The individual’s average income should be more than ₹1 Lakh per annum.
- The business should be in profit for a minimum of 2 years.
- People eligible for a Professional Loan include Chartered Accountants (CAs), Lawyers, doctors, and other similar professionals.
Documentation
Before applying for a loan, you should ensure that you have all the relevant documents required for the loan application. These documents include:
- Valid identity proof like a Passport, Voter ID, Aadhaar card, PAN card, etc.
- Valid proof of address like an electricity bill with your name on it.
- Your previous six months’ account statement.
- Continuation proof like ITR, sales tax certificate, trade license, and establishment certificate.
- Official computation of your income like a balance sheet or profit and loss account audited by a CA.
- Miscellaneous documents like Certified copies of partnership deeds, Sole proprietary declarations, etc.
Having these professional loan eligibility documents ready with you will make the process simpler and more efficient.
Advantages of a Professional Loan
A Professional Loan does not require any collateral and is especially beneficial for professionals starting out in their field. The entire process is paperless, hassle-free, and online with fintechs like Poonawalla Fincorp. Another advantage of a Professional Loan is that it provides many options for pre-payment or part payment of the loan amount.
Also Read: What You Must Know Before Signing on as a Loan Guarantor!
Application Process
The application process for a Professional Loan is straightforward and similar to other loans. All you have to do is visit the official website of the respective loan provider, go to the loan section and click on the ‘Apply Now’ button.
After this, you will have to fill out your details and provide the relevant documents to complete the application and apply for the loan. Post this, the lender will verify your details and send you the documents for accepting the loan. Your loan will be disbursed to your account after you sign this document.
Conclusion
Excelling in a professional sphere is every good professional’s dream, and to achieve this, you need to have the right financial resources. A Professional Loan is a great way to gain these financial resources, and the more experienced you are in your field, the better your loan deal will be.
Also Read: Why Line of Credit Facility is a Smart Choice for Business?
Therefore, if you want the right Professional Loan for yourself, it will be a good idea to gain experience in your field. You can then procure your financial resources through a Professional Loan, leveraging your experiences to get a good deal and improve your business exponentially.