5 Things to consider for a chartered accountant professional loan

5 Things to consider for a chartered accountant professional loan

Chartered accountants planning to set up their own practice or expand their existing firm can consider availing a professional loan for chartered accountants. These loans can be used for purchase or extension of office space, technology up-gradation, the fulfilment of working capital needs, hiring trained staff, and the likes.

However, before applying for a professional loan for chartered accountant, there are several aspects that applicants should keep in mind. These aspects have been discussed below.

  1. Total cost of the loan

Before opting for a loan for chartered accountants, applicants need to consider the overall cost of the loan. To determine the total cost of the loan, applicants need to take into account factors such as interest rates, associated charges and so on. Some of the standard charges that financial institutions levy on these loans include –

  • Interest rate
  • Processing fee
  • Bounce charges
  • Document processing charges
  • Penal interest
  • Prepayment/foreclosure fees
  • Annual maintenance charges

While applying for a chartered accountant professional loan, there are two types of interest rate that borrowers can opt for – fixed and floating interest rate. One should keep in mind that the type of interest rate they opt for will also significantly affect the overall cost of the loan.

  1. Eligibility criteria

Before applying for a loan for chartered accountants, individuals should go through the eligibility criteria set by the lending institution for a hassle-free application procedure. The basic requirements for such a loan include the following –

  1. Applicants should hold a minimum of four years of experience as a practising CA.
  2. They should be a residing citizen of India.
  3. Applicants must own a property like a house or an office.

Apart from these requirements, borrowers can also use a loan eligibility calculator to check the amount they are eligible for. They need to input the following details in the calculator –

  • City of residence
  • Date of birth
  • Monthly income amount
  • Total monthly expenses

After submitting the amount, the eligibility calculator will display the total amount a borrower is eligible for. It will enable them to decide the exact loan amount to avail from a financial institution.

  1. Documentation requirements

Besides CA loan eligibility criteria, borrowers should also go through the list of documents required while applying for a loan for a chartered accountant. These have been given below –

  • KYC documents like voter ID, Passport, Driving license, Aadhar card, PAN or any other officially valid document
  • Certificate of Practise
  • Bank account statements
  • Proof of property ownership

However, it is crucial to keep in mind that this list of documents can vary for each lender. Hence, individuals should ask their lending institution for a full list of documents required before applying.

  1. Application procedure involved

Knowing the application process beforehand can simplify the hassles of availing the advance. Applicants can apply for a loan for chartered accountants online by following the steps below –

Step 1: Visit the lending institution’s website.

Step 2: Go to the professional loan for chartered accountant section and click on the online application form.

Step 3: Enter the requisite details in the form, which include personal, professional, and financial details.

Step 4: Verify the information entered and submit the application form.

Some lending institutions like Bajaj Finserv also provide pre-approved offers to customers for a seamless loan application procedure. Such offers can be availed on several financial products like business loans, personal loans, etc. One can check their pre-approved offer quickly by providing only their name and contact information.

  1. CIBIL score

Professional loans for chartered accountants are available as both secured and unsecured credits. Consequently, lenders refer to the borrower’s credit report to gain an idea regarding their repayment behaviour. As such, it is essential to know how CAs can increase their CIBIL score by implementing methods such as repaying all existing debts, making payments on time and so on.

These loans are custom-made to meet the various needs of a chartered accountant, and therefore, offer quick approval and fast disbursal of the loan amount. Furthermore, applicants can also avail additional benefits like repayment flexibility while applying for a professional loan.

Peter