For individuals planning to set up their medical practice or expand an existing clinic, external funding can serve as the most viable solution to acquire the capital. Nonetheless, with multiple financial institutions offering several benefits like low professional loan interest rates, it is also possible for loan-seekers to face a dilemma in making a choice.
To avail of a credit option that is affordable as well as adequate, individuals need to ask themselves a few important questions before applying for a loan.
Which loan type should you opt for?
Depending on the financial institution, individuals can opt for secured funds or collateral-free professional loans. Generally, borrowers opting for unsecured funding can avail of up to Rs.35 lakh to meet their requirements. On the other hand, a doctor loan against property offers a remarkably higher amount of up to Rs. 50 lakh. It is important to consider the loan amount you require before deciding on any of these types of professional loan for doctors.
What is your fund requirement?
Getting a near-accurate estimation of your fund requirement beforehand is important since it can affect your repayment significantly. While under-borrowing can negate the whole purpose of external funding, over-borrowing can lead you to pay unnecessary interest with your principle.
For effective financial management, list out all the reasons to take a business loan for doctors. These can include upgrading medical equipment, hiring professionals, renovating your clinic, installing new software, or buying a new office space, among others. Depending on the utility, request NBFCs for a suitable loan amount.
What is your repayment capacity?
Besides loan requirement, individuals must also consider their financial standing to prevent burdening themselves with taxing debt. Make a tally of your monthly income and expenses to determine what percentage of disposable income you can comfortably deposit to repay the loan for doctor. Thereafter, choose a suitable repayment tenor, depending on your EMI affordability. Note that a longer loan tenor might result in smaller EMIs, but will eventually result in higher payment of professional loan interest rates. On the other hand, a shorter tenor can be a preferable option for borrowers with higher affordability since it facilitates greater interest savings, even if the EMI amount to be serviced is higher.
Does your lender offer flexible policies?
With numerous financial institutions offering multiple borrowing facilities, it is advisable to choose the best after comparing several policies besides professional loan interest rates. These include maximum loan tenor, repayment options, part-payment facilities, and additional charges like processing fees, documentation fees, etc.
Also, check for additional lender-specific benefits. For instance, some lenders like Bajaj Finserv extend pre-approved offers against such professional loans to take off the hassle of elaborate verification and prevent delay in loan disbursal. These offers are available against several financial products, including personal loans, business loans, etc. Check your pre-approved loan offer by entering your name and contact details to avail such offers.
Are you eligible for a professional loan for doctors?
Probably the most important question to ask before getting such an advance is how to be eligible for a doctor loan. Besides maintaining a decent CIBIL score, preferably above 750, here are some of the experience requirements depending on individuals’ medical degree type.
- Super Specialist doctors: Should have an MBBS degree registered with the medical council.
- BHMS/BAMS: Minimum 2 years post the date of medical registration.
- MBBS: Post-registration with the medical council.
- Dentist/MDS: At least 5 years since medical registration date.
Mandatory documentation comprises KYC and certificate of medical registration.
Note that the above requirements were for unsecured professional loans. Individuals seeking a professional loan against property might need to meet different eligibility parameters.
With so many factors affecting a doctor loan, besides professional loan interest rates, it is advisable that individuals choose their suitable loan type and amount only after considering the above questions.