Among the various types of personal loans available to professionals are those offered to people who practice specific professions. Some examples are accountants, doctors, engineers, management consultants, etc.
Whether it’s updating equipment, renovating a workplace, or building a new facility, this professional loan provides working capital for the business.
In most cases, government banks offer these loans, whereas private banks offer them only in limited situations. Loans for specific professions are considered to be important because they are tailored to meet the specific goals and are defined and clear. Profession-specific loans have several advantages. Below is a list of some.
- Interest rates and tenors that are suitable
- Applications are easy to fill out
- A prepayment penalty is not charged (varies by bank)
- Term and condition of collateral are easy
- Disbursement of loan funds with flexibility
- Dealers or suppliers may be paid in some cases
The benefits mentioned above could change from time to time as different banks offer different services and features. An applicant may choose the professional loan offer that best meets his needs from various banks. The applicant should know all their loan details, as there may be hidden fees or collateral they are uncomfortable with.
These benefits can be obtained by applying for such a loan:
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An increase in the loan principal
For self-employed applicants and salaried professionals whose daily needs are quite high, professional liability insurance is available for as much as Rs. 50 lakh.
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Combined Benefits
The engineer loan can offer the perks of a personal loan for salaried applicants and the benefits of a business loan for self-employed applicants, according to the applicant’s profile.
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Minimal Interest Rates
The cost of borrowing for these types of loans is higher than that of secured loans since they are unsecured in nature. You can obtain reasonable interest rates if you choose a reliable bank or non-banking financial company (NBFC).
The best way to find a professional loan
Using a professional loan app can help you save a lot of money by reducing wasteful expenses while repaying a professional loan.
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Credit Score
It’s the very first thing a lender checks when sanctioning a professional loan. Your credit score indicates whether you are creditworthy or not. Loans for professionals are available for applicants with credit scores over 750.
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Necessity of Availing
Loans should only be taken out when necessary. The idea of quick cash with great deals can be enticing but refrain from applying for professional loans through instant loan apps unless it is absolutely necessary.
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Look Out for Offers
After extensive research, applying for a professional loan on an instant loan application is always a good idea. Certain NBFCs are likely to offer you attractive offers and features.
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Credibility of Lender
Prior to applying for a loan, you should conduct thorough research and check reviews and ratings of loan applications to prevent any hiccups during repayment.
Why should you take out a professional loan?
- End-user flexibility.
- Approvals are processed more quickly.
- Documentation process that is easy to follow.
- The amount of the loan is higher.
- Collateral is not required.
Is it possible to get professional loans in India of different kinds?
At present, professional loans are only available to three to four types of professionals, primarily doctors, engineers, and chartered accountants. Perhaps another category of professionals will also be eligible for similar benefits shortly, but for now, let’s just focus on the current options.
Consequently, a person can apply for a professional loan regardless of where they live and their occupation. Their only requirement is that they must meet the criteria set by the lender for eligibility. Even though it isn’t explicitly mentioned in the eligibility criteria, the applicant must also have an excellent CIBIL score and a solid repayment history.