Professional Loans

A professional loan is a special category of loan, which offered to professionals like Doctor, Chartered Accountant, and Lawyers Etc. The loans are customized to suit the specific need of such professionals and can be taken for multiple purposes. For example, scaling up operations, expansion of business premises, hiring new employees, purchasing equipment etc.

The usage terms of the loan are not just restricted to meeting expenses towards professional goals, but it can also be used for meeting personal expenses like weddings, vacations, house renovations etc.

Compared to normal personal loans, the professional loan comes with easy eligibility criteria and a quick application approval process. Such loans are also offered to eligible applicants at prefrontal rates & terms.

 

Features of Professional Loans

• The features of professional loans differ across each bank. Some of the latest features that can be seen across the private banks are:
• The professional Loans can start from a few lakhs to an amount as huge as Rs 2 crores.
• There is no mandatory requirement of security or collateral. However, some banks may demand it.
• The tenure of the loan extends up to 5 years
• The rate of interest and the loan amount depends on the nature of the profession or the business. For e.g. Doctors, Chartered Accountants, CS, CWA, etc.
• The professional loan can be used for any purpose such as working capital requirement, purchase of equipment, office renovation, etc.
• The repayment of the loan is extremely flexible. You can choose to repay the loan through EMIs, Post-dated cheques, or through an ECS Mandate.
• Many banks offer professional loans on separate terms and conditions for Business with audited financials and business with no formal books of accounts.
• Certain business-related travel expenses such as airfare, accommodation, seminar fees, etc. can also be financed through professional loans
• Usually, the loan is disbursed in bulk to the owner of the business. However, in some cases, the payment can be directly made to the suppliers

 

What are the eligibility criteria for Professional loan?

The eligibility criteria for professional loans are very straightforward:

• Individuals in the age group of 18 to 65 years.
• People who are already practicing their professions as per licenses issued by the state or central legislation.
• Copy of professional certificate denoting that they practice the said profession.
• Professionals with a diploma/degree certifying their qualification in the capacity of lawyers, engineers, software engineers, journalists, chartered accountants, management consultants, etc.
• Individuals, partnership companies, firms, and proprietorships can also apply for this type of loan.

 

Documents required to apply for a professional loan

• There is minimal documentation requirement for professional loans. You would require submitting certain proofs related to your profession.
• Membership certificate which is issued by the respective professional authorities in that regard.
• Income statements for the last 3 fiscal years, audited financial statements or income tax returns for the last three years.