There are few options for professionals when it comes to taking unsecured debt in the market. A personal loan and a professional loan are the two most favored choices among borrowers. It is important to understand how professional loans score against personal loans so that you can make an informed choice when it comes to deciding between the two.
Several lenders have launched tailor-made loans for professionals like Chartered Accountants, Company Secretaries, or doctors. These are specialized loan products that have been designed keeping in mind the unique requirements of professionals. These are different from a personal loan or a business loan. Like a personal loan is designed for any individual or a business loan is designed for businessmen, a professional loan has been designed after considering the challenges that are faced by professionals.
Here is how professional loans score over personal loans:
When it comes to eligibility, any salaried, businessman or professional is eligible to take a personal loan. In comparison, you need to be a professional like a Chartered Accountant, Company Secretary, or doctor to take a professional loan. This is the biggest difference when it comes to being eligible for a professional loan as compared to a personal loan.
In other words, a professional can opt for a personal loan but anyone who is not a professional belonging to a certain profession cannot take a professional loan from a lender. There are several benefits like zero prepayment and foreclosure charges and low processing fees in case of a professional loan that makes it an attractive option.
2. Documents required
The documents required under personal loan and professional loan are not too different from each other. Simply put, you need KYC and income documents for a personal loan and since a professional loan is applicable for professionals working in select professions, you need to submit education and experience details as well.
Both these loan products rely on the income and credit profile of the borrower to grant the loan. You just need to add the documents relating to your education and experience to be eligible for a professional loan.
3. Interest rate
The interest rate under a professional loan is better as compared to a personal loan. The rate of interest under a professional loan starts from 9.99% per annum while a personal loan interest rate usually starts from 12% per annum. This can be better understood with help of an example.
A professional loan of Rs. 15 lakh for 5 years at a rate of interest of 9.99% per annum will attract an EMI of Rs. 31,863 with a total interest payable during the tenure being Rs. 4.1 lakh. At the same time, a personal loan with the same amount and tenure at 12% interest will increase the EMI amount to Rs. 33,367 and interest amount to Rs. 5.02 lakh.
In other words, if you can get a professional loan you should opt for one as compared to a personal loan. The rate of interest under a professional loan is lower than a personal loan which will help you reduce your EMI amount and interest outgo.
4. Loan amount
The loan amount that you can take under a professional loan is higher as compared to a personal loan. The maximum amount that you can get will depend on the policies of the lender and the profile of the borrower.
All in all, the loan amount that you can get under a professional loan is more than what you can get under a personal loan. If you are looking at a higher loan amount to meet your goals, it is better to opt for a professional loan rather than a personal loan.
Professional loans score high almost on all parameters. Also, lenders usually extend relaxed terms in the case of professional loans. Therefore, it is better to go for a professional loan rather than a personal loan if you are working in specialized professions which can get a professional loan from lenders.
Poonawalla Fincorpextends a loan of up to Rs. 30 lakhto professionals, with zero hidden charges and quick processing. Poonawalla Fincorp understands that professionals lead a busy life. Therefore, we offer complete online processing of loan applications which does not need you to visit any branch or office to submit your application or any paperwork. Apply todayfor a professional loan with Poonawalla Fincorp.
How magical was the day when you discovered your career path? After a lot of research, putting in so much hard work, late nights, your heart and soul, you have become what you are today.