The Institute of Chartered Accountants of India reported an increase of 37% for newly qualified CAs. Many of these new candidates look to open their own firms at some point in their careers. Insufficiency of credit often curbs the rise and establishment of such chartered accountancy firms.
As a result, chartered accountants are looking to enhance and establish their business and often need to depend on loans at a higher interest rate. However, instead of servicing loans with unfavorable terms, professionals can seek a customized personal loan for chartered accountants, specially designed to cater to business practices, consulting needs or meeting any other financial requirements.
However, before opting for a personal loan for chartered accountants, one should ask the following questions –
- What are the eligibility parameters for CA loan?
Before applying for a loan for chartered accountants, one should confirm whether they are eligible to avail a sizeable principal amount or not. It will help them avoid future complications and reduce the chances of loan rejection that can negatively affect their credit score. Even though the criteria fixed by lending institutions vary, every applicant must adhere to some standard parameters. These include the following –
- The applicant or his/her parents must own a property
- He/she should have a minimum experience of 4 years after receiving the practice certificate.
- What documents do you need to submit?
Applicants must also submit a few essential documents while applying for a loan for chartered accountants for the verification process. The list of documents are mentioned below-
- KYC documents including identity proof such as Aadhaar, PAN, Voter ID, driving license, etc.
- Certificate of practice
- Property ownership documents
Besides the documents mentioned above, lending institutions may ask for other relevant documents.
- What is the interest rate for such a loan?
Borrowers should conduct exhaustive research on financial institutions regarding a personal loan for chartered accountants and determine the lowest interest rate available.
Moreover, borrowers can reduce FOIR, maintain credit utilisation ratio and improve credit score to avail the best CA loan interest rate.
- How long do you have to repay the debts?
Based on a business’s financial position, borrowers can choose to pay their advances within a tenor ranging from 12 to 96 months, which will help optimize monthly liabilities as per one’s income.
- Are there any additional fees on such loans?
Besides the interest rate, lending institutions charge other fees on a personal loan for chartered accountants. Hence, before applying, borrowers should have a clear idea about these additional expenses. Some of the standard fees charged by the lenders are:
- Processing fee
- Penal interest
- Bounce charges
- Document processing charges
- Do you need to provide any collateral?
This unsecured credit does not require any collateral, and the amount is approved based on years of experience, credit score and existing cash flows. It can be used to meet any financial requirements and borrowers have full freedom in loan utilization.
- What are the additional benefits of this loan?
While applying for a loan, one should always check for additional features and benefits. For instance, some NBFCs like Bajaj Finserv offer a Flexi-loan facility, which will allow borrowers to withdraw a required amount from a pre-sanctioned sum. Interest is levied only on the amount withdrawn. Hence, applicants can easily fund their CA firm’s working capital needs with a flexi loan.
Apart from these benefits, borrowers should also look out for pre-approved offers extended by reputed lending institutions that reduce complications and accelerate loan application process. These offers can be availed on credit cards, personal loans, business loans, etc. One can check his/her pre-approved offer by entering nominal information such as their name and contact information.
Individuals should also consider applying for a loan with financial institutions that provides online account management facilities to keep track of EMI paid and remaining dues.