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Professional Loan: Eligibility and Benefits

When you first launch your own company, you likely have many goals and high aspirations. A desire to succeed professionally, draw in the best clients, expand your business, and make a name for yourself. But on occasion, it appears as though these goals are abandoned because of financial constraints. Sufficient capital and proper financial planning are necessary for business expansion. However, despite your best efforts, there may still be a cash deficit. One solution is a professional loan. Whether you’re a management consultant, doctor, writer, photographer, or chartered accountant, you’ll need a professional loan if you wish to increase the scope of your services. Banks provide professional loan for doctors, charted accountants, etc.

What is a professional loan?

Working professionals from particular professions, such as doctors, lawyers, and chartered accountants, are eligible for professional loans. These are unsecured loans provided to professionals who charge a fee for their professional services. These loans are helpful for these professionals since they may utilize the money to upgrade, expand, or meet any other professional needs they may have.

The fact that a professional loan does not require any collateral with the lender as security for a specific amount is one of its main advantages. You could need to put up collateral, though, if the amount exceeds the lender’s limit.

Eligibility requirements

You must meet the following eligibility requirements in order to be eligible for a professional loan:

  • should be an Indian citizen
  • 25 years should be the minimum eligibility age and 65 years should be the maximum eligibility age.
  • Professionals and non-professionals alike can apply for a professional loan, including doctors and chartered accountants.
  • The minimum annual income should be Rs. 1 lakh.
  • The company must have generated profits for at least the past two years.

In contrast to personal loans, professional loans have simple eligibility requirements and a speedy application approval process. Some professionals are also given special treatment when applying for these loans. Some advantages of a professional loan are listed below.

Interest rates

Compared to personal loans, professional loans are frequently offered at competitive interest rates. As a result, you are able to borrow more money at a favorable interest rate. Compared to other unsecured loans, this is a more affordable choice for consumers. If you have a credit score of 750 or more, you can easily qualify for a loan with favorable terms.

Loan amount

A professional loan might range in size from a few lakhs to one crore and beyond. Your qualifications and professional profile will determine this. The professional loan can be used to fund your company’s needs.

Minimal documentation and easy approval

You can apply for a professional loan if you are a professional who wants to grow a business but does not have much time. Applying for a professional loan is simple and requires little documentation. When you need money the most, instant disbursement makes it easier for you to secure it.

Unsecured debt

It is comparable to a personal loan because it is an unsecured debt. No property needs to be given up to secure the loan. Simply meet the requirements for a personal loan and submit your paperwork for inspection to get the loan approved.

Flexible tenure

Due to their flexible credit terms, professional loans are more popular. In accordance with your comfort level and ability to repay, you can budget and select the duration. The repayment period may be anything from 12 to 84 months.

When requesting a professional loan, it would be prudent to keep in mind that the terms and conditions may vary amongst lenders. Before they disburse the loan, they could have requirements like a minimum wage, employment experience, age, credit score, etc.

Conclusion

Professional Loans have a role in business expansion. Whether your company is established, receiving funds from investors, or relying exclusively on your savings, you will eventually need a professional loan. Borrowing money for a business involves some risk, there is no doubt about that. You must therefore be very cautious and covert while discussing your decision to obtain a business loan.

 

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