Chartered accounts play a significant role in the economy not only as financial advisors but also in ensuring the overall financial health of businesses, and the economy in general. However, to scale up their practice, they often need financial assistance. For instance, to expand their firm or hire new employees for an existing practice, they require sufficient working capital. Not to mention, the personal funding needs that can include the likes of medical emergencies, travel, marriage, education, etc. In such cases, a customised CA loan can be an excellent option for quick financing.
Since several lending institutions provide a professional loan for chartered accountants, choosing the best can be challenging. For that, one needs to keep several things in mind while applying for such a professional loan.
Things to Consider When Availing a Loan for Chartered Accountants
A loan for chartered accountants offers a range of facilities that can efficiently meet their financing needs with ease.
Thus, when availing a CA loan, chartered accountants need to consider a few essential pointers that can help them arrive at the best loan option.
1. Loan Eligibility
Though loans for CAs, like business loans, do not involve any end-use restrictions, defining your business goals to the lender increases your loan eligibility. Along with that, quantifying financial requirements also proves to be beneficial in the long. It makes sure that you are not over-borrowing and burdening yourself with sizable EMIs for an extended period.
Not to mention, CAs also need to meet the lender eligibility before applying. All of these factors, along with their repayment capacity, help decide the loan amount they are eligible for.
For a more detailed idea, you can also take the help of a CA loan eligibility calculator available online. On entering some essential credentials like your financial history and others, it shows your eligibility instantly.
2. Interest Rates and Other Charges
One of the advantages of availing loans as chartered accountants is that they are well aware of different financial terminologies and definitions. However, when it comes to availing a loan for chartered accountants, they need to consider the interest rates and other charges carefully to ensure that they do not overburden their finances during repayment.
Also, higher interest rates mean increased EMI quantum that can pinch one’s monthly expenses. Apart from that, lenders also levy different additional costs, for instance, processing fee, prepayment fee and others.
Hence, before availing such loans, one needs to compare these charges and also ascertain that there are no hidden charges as such. It constitutes a part of the 3-point checklist to apply for a CA loan.
3. CIBIL Score and Creditworthiness
Since CIBIL score is a standard parameter to gauge one’s creditworthiness, lenders often give it a significant weightage when evaluating loan applications. Higher the CIBIL score higher will be your CA loan eligibility. Loan experts thus advise maintaining a minimum credit score of 750 for increased chances of loan approval.
4. Updated Financial Records
Documentations constitute a vital part of loan approval. Hence, during the application procedure, you need to showcase all your financial and business-related records.
A lender sanctions a loan amount only after assessing your monthly cash flow, sources of income, previous months’ bank statements and such other documents. Thus, it is of utmost importance to maintain all the records updated before applying for a loan.
5. Compare Different Lenders
Lending institutions like Bajaj Finserv offer CA loans, wherein personal advances can amount to Rs.25 lakh while home loans and loans against property can go up to Rs.2 crore, all with an affordable repayment structure. Along with that, they also provide different borrower-friendly facilities like loan prepayment with no extra charges, extended tenures, and others.
Furthermore, they also provide pre-approved loan offers that ensure hassle-free loan processing in minimum time. Such an offer is also available for different financial products such as business loans, personal loans, etc. You can check your pre-approved offer instantly just by providing your contact number and name.
Thus, before settling for a lender, compare with others and decide accordingly for maximised benefits.
Along with considering these vital factors before availing a loan, you should also gain a sound understanding of the eligibility criteria and documents needed to apply for a CA loan. Meeting all the lender requirements will improve the chances of faster loan approval and disbursal.