What is Professional Loan

Everything You Need to Know About Professional Loan

March 19, 2022 • 41403 views

Professionals like Character Accountants (CA), Company Secretaries (CS), and doctors opt for Professional Loan regularly. It is an essential financial instrument for professionals seeking additional financial assistance to take their professional practice to the next level. As a professional, you can get loan for various lending institutions such as banks, new-age NBFCs (Non-Banking financial companies), etc. Before applying for a Professional Loan, learn about what a professional loan is, its types and interest rates, and how to apply for a Professional Loan. Read on! 

What is a Professional Loan?

A Professional Loan is a type of loan that can be availed by professionals like CA, CS, and doctors. A Professional Loan can be used for various purposes, such as expanding your practice, enhancing your professional skills, renovating your office space, etc. 

Apply for Professional Loan

Types of Professional Loan

There are majorly three types of Professional Loan you can apply for such as:

1. Professional Loan for Doctors

As a self-employed doctor, you can apply for a Professional Loan can avail loan up to Rs.50 Lakh with attractive interest rates starting at 11.49% p.a.

2. Professional Loan for CS

As a self-employed CS, you can apply for a Professional Loan and avail of a loan up to Rs.50 Lakh with attractive interest rates starting at 9.99% p.a.

3. Professional Loan for CA

As a self-employed CA, you can apply for a Professional Loan and avail a loan of up to Rs.50 Lakh with attractive interest rates starting at 11.49%.

Professional Loan Interest Rates

Professional Loan interest rates start at 9.99% p.a. If you have a good CIBIL score, you can secure a Professional Loan at a favourable interest rate. Along with rate of interest, there are other charges applicable on a Professional Loan, such as:

Pre-payment Charges

In case the loan is prepaid from own sources there is no charges are applicable.

If the loan is prepaid from other sources 4% prepayemnt or foreclosure charges are applicable.

Processing Fees

The professing fee for a Professional Loan is up to 2% of sanction amount plus applicable taxes.

Late Payment penatly

The late payment penatly for professional loan is 3% charged on the defaulted EMI amount every month.

For any cheque bounce, you will be charged Rs. 500 per bounce, plus the applicable taxes.

 

Things to Note While Applying for a Professional Loan

As a borrower, you must keep a few things to note while applying for a Professional Loan:

  • Assess your funding requirement: The first step when applying for a Professional Loan is to know your monetary requirements. Your financial needs will be different from any other professional. Generally, the latter will borrow a higher amount because of expensive equipment, medicines, etc. Therefore, it is advisable to understand how much you need to borrow before approaching any lender for a professional loan.
  • Minimum and maximum funding available: Each lender – bank or financial institution – sets a minimum or maximum loan limit. You should check the minimum and maximum funding available from the concerned lender and see if that meets your professional financial requirements.
  • Compare different interest rates: Each bank or lending institution charges a different interest rate for professional loans. Usually, the interest rate for Professional Loans is between 10-18% per annum. The higher the interest rate, the higher would be the loan repayment burden in the form of EMI. Therefore, when applying for a professional loan, compare different lenders as per their interest rates, and choose one that offers the minimum rate of interest on professional loans.
  • Collateral requirement, if any: Generally, Professional Loans are unsecured loans available without any security or collateral. However, some lending institutions might ask you to present collateral before availing of the loan. Therefore, when selecting the loan provider, check if the professional loan requires collateral and if you are willing to meet the requirements.
  • Processing fee: It is the one-time charge you pay to the bank or the lending institution when you avail of a professional loan. The processing fee covers the cost incurred by the lender on the loan process. The processing fee varies across lenders. Hence, it is best to compare it across lenders and choose a lender with a low processing charge.
  • Pre-payment or foreclosure charges: As a professional, your income is uncertain. You might earn exceptionally high in some months, and lower in some other months. Therefore, you might want to prepay or foreclose your professional loan. However, pre-payment or foreclosing your professional loan might require you to pay a penalty. Choose a lender that charges minimum or no pre-payment or foreclosure charges.
  • The credibility of loan provider: Check the credibility, reliability and market standing of the lender before availing of any Professional Loan. This is important to be safe from any legal liabilities or financial issues during the loan tenure.
  • Availability of digital and contactless processes: Given the current pandemic and increasing digitisation, choose a loan provider that offers a digital and contactless loan process. Facilities like online applications, direct account receipts, mobile apps, digital payments, etc., assure comfort and ease in loan processing.
  • Ease of documentation: Generally, professional loans involve minimum documentation. Lenders only assess your working experience and professional degree to grant the loan. Hence, choose a lender that has a minimum and hassle-free documentation rather than a complicated documentation process.
  • Time of approval and disbursal: As a professional, you know opportunities strike unexpectedly. Hence, if you want to make the most of a chance, it is good to plan your finances well. Choosing a lender that offers quick approval and disbursal of funds will suit your purpose well.
  • Convenient tenure: All things being equal, a short professional loan tenure will mean you pay higher monthly instalments. Thus, you would be eligible for a smaller loan amount than if you choose a longer tenure professional loan.

Following the above points will help you choose the desired loan amount and the Professional Loan lender.

How to Apply for a Poonawalla Fincorp Professional Loan?

You can apply for a Poonawalla Fincorp’s Professional Loan by following these three simple steps:

  • Step 1: Click on the ‘Apply Now’ button.
  • Step 2: Fill in the required details on the loan application form.
  • Step 3: Upload necessary documents.

On successful verification, the loan amount will be disbursed into your bank account instantly. 

Conclusion

Irrespective of your profession, understanding your financial requirements is essential while applying for a loan from any lending institution. It helps you avoid any delay in repayment or any default payment. With a complete understanding of a Professional Loan, you can easily choose the loan based on your profession and financial requirements. Moreover, it is important to maintain a good credit score to avail your desired loan amount, tenure and rate of interest. With a high credit score, you can avail of a loan amount up to Rs. 50 Lakh from Poonawalla Fincorp.

Frequently Asked Questions

1. Do I need to keep collateral to avail of a Professional Loan?

A Professional Loan is collateral-free you don’t need to keep security as collateral to avail of the loan. However, you must check with the leader to understand better about all the loan terms and conditions.

2. What is the eligibility criteria for a Professional Loan?

To avail a Professional Loan, you must meet the below eligibility criteria:

  • Must be a citizen of India.
  • Must be aged between 24 years (at loan application) and 65 years (at loan maturity).
  • Must have professional experience of at least one-year, post-qualification.
  • Must have minimum annual professional receipts of Rs. 3 Lakh.

3. What is the document required for a Professional Loan?

To apply for a Professional Loan, you must submit the below-required document:

  • KYC documents: PAN Card/Aadhaar Card/Driving Licence/Voter ID/Passport
  • Financial documents: Bank account statement from the last 6 months.
  • Qualification documents: Certificate of Practice and Degree Certificate

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Professional Loan disbursal is at the sole discretion of Poonawalla Fincorp. 
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

We are a team of expert writers and editors passionate about providing our readers with authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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