Professional loans are personal loans offered exclusively to people practicing various professions, thus the name. This could be an accountant, doctor, engineer, consultant, or management consultant.
A professional loan might work for all types of business requirements, whether updating equipment, remodeling a workplace, constructing new buildings, or generating working capital. This type of loan is available from a government bank in most cases. Private banks rarely offer this type of loan. A professional loan is important because it serves a specific purpose and is profession-specific, thus, defined and clear. There are several benefits to taking out a professional liability insurance loan. Listed below are some of them.
- Interest rates and terms that are suitable
- Applications are easy to fill out
- (varies for different banks) No prepayment penalty
- Collateral terms and conditions that are easy to understand
- Disbursement of professional loan amounts with flexibility
- A dealer or a supplier may be paid in some cases
There is no definite list of benefits listed over here as the offers, and features of various banks can change from time to time; an applicant can choose the offer that best suits him. There may be hidden charges, collateral, and other factors that an applicant might not be comfortable with. Knowing as much detail as possible before applying for a professional liability insurance loan is necessary.
What are the steps to applying for a professional loan?
Now that you know all these things, you can easily apply for a professional loan online by following the steps below:
- Navigate to the professional loan application page on the website of your chosen lender
- Complete your online form with the necessary information carefully and accurately
- Documentation should be attached
- The loan provider will assess the application
- After approval, you get your loan amount in your account within 24 to 48 hours.
There may be some differences in eligibility criteria between lenders, but most lenders generally take the following professional liability insurance factors into account.
- Borrowers must be Indian nationals aged 21 to 65 years.
- According to existing practices, the annual income for a professional loan should be at least Rs.1 lakh.
- The amount of loan a person gets depends on the amount of experience in their field.
- Those with 4-5 years of prior experience in their field are more likely to receive a higher diploma in their line of work.
Working professionals must provide minimal documentation while applying for a professional loan. Documentation requirements will vary between lenders, just as eligibility criteria will. These are the most commonly requested documents by lenders to assist you in the process.
- A PAN card, an Aadhar card, a passport, and a voter card are acceptable identification documents.
- Identification proof- Aadhaar, Passport, Voter ID, Driving License, electricity bills.
- Proof of Address- Aadhar Card, Passport, Voter ID, Driving License, electricity bill.
- Form 16 details the last two years’ income tax returns
- For existing practices, financial statements of the business include Profit and Loss statements
- Obtain copies of your professional degrees if you are setting up a new practice
- A collateralize professional loan requires documentation of the collateral property.