Professional loans are meant for working professionals from specific fields such as doctors, lawyers, and chartered accountants. These are unsecured loans given to professionals who give professional services by charging a fee. Such loans are useful for these professionals to expand, upgrade or use the funding for any other professional requirements they may have.
One of the key benefits of a professional loan is that it does not require any collateral with the lender as security for a certain amount. However, if the amount exceeds a specified limit of the lender, then you may have to pledge collateral.
The interest rate for professional loans usually ranges from 14 per cent to 20 per cent, depending on respective lenders and the eligibility of the professional. As compared to personal loans, the professional loan comes with easy eligibility criteria and a quick loan application approval. Such loans are also offered to certain professionals at preferential rates. Below are some of the benefits of a professional loan.
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Interest Rates
Professional loans are often offered at attractive interest rates as compared to personal loans. Therefore, you can take a higher amount of loan with attractive interest rates. This is a pocket-friendly option for borrowers as compared to other unsecured loans. If your credit score is 750 and above, you can easily secure the loan with attractive interest rates.
Adhil Shetty, CEO, Bankbazaar.com, explains, “Professional loans are unsecured loans and give easy access to the much-needed funding. Before applying for such loans, you must compare the interest of different lenders, go through terms and conditions of the loan, factor in additional costs and calculate EMIs and interest components before signing the dotted lines of the loan agreement.”
Loan Amount
A professional loan can begin with a few lakhs to a crore and above. It depends on your professional profile and eligibility. You can use the professional loan to meet your business requirements.
Minimum Documentation and Easy Approvals
If you are a professional who is looking forward to expanding a business but do not have much time, then you can go for a professional loan. It is easy, with minimum documentation, to apply for a professional loan. Instant disbursement helps you arrange funds when you need them the most.
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Online Application Process
You do not need to visit a bank branch to apply for a professional loan. These days, almost all financial institutions give you options to apply for a professional loan online. If you have an existing relationship with the bank, you can quickly apply and get the loan disbursed without too many formalities.
“A professional loan can be applied online without physically visiting the bank branch. You can simply fill in an online form and get the loan disbursed if you meet the eligibility criteria of the lender,” adds Shetty.
Unsecured Debt
Since a personal loan is an unsecured debt, it is like a personal loan. You do not need to pledge any asset to secure the loan. You can just fulfil the personal loan eligibility criteria and submit your documents for verification to get the loan approved.
Flexible Tenure
Professional loans are preferred owing to flexible loan tenures. You can budget and choose the tenure according to your comfort and repayment capacity. The repayment tenure may range between 12 and 84 months.
It would be best to remember that lenders might have different terms and conditions when applying for a professional loan. They may have a minimum salary requirement, work experience, age, credit score etc., before they disburse the loan.
