A chartered accountant loan is a customised financial product designed to meet the unique monetary requirements of CA professionals. These offer sufficient finance to pay for your business expansion, various personal expenditures, and other big and small costs. Usually, loans for chartered accountants come in 4 different variants to cater to the varied needs of an individual.
Depending on his/her necessity, an applicant can avail a personal loan, a business loan, a home loan, or a loan against property. Financial institutions offer attractive CA loan interest rates along with various other features and benefits to borrowers who apply for such a credit.
An applicant can also avail a CA loan without pledging any collateral. There are several methods of how one can apply and qualify for such an unsecured credit.
A borrower with a positive financial history can apply for a loan without any collateral. Lenders look for a few important criteria like credit score, FOIR, current liabilities, etc.
• Credit score – Credit or CIBIL score is the numerical representation of one’s financial history and is one of the most important CA loan eligibility criteria. Lenders look for a healthy CIBIL score before approving an unsecured loan because it represents the borrower’s creditworthiness. Usually, a score of 750+ is considered preferable for such advances.
A borrower applying with a decent credit score can avail larger loans, negotiate the interest rate, and get several other benefits from the lender. There are several ways how CAs can increase their CIBIL score to avail an advance without pledging any collateral. Paying off existing debts before applying for new ones, making timely payments to credit card bills, utility bills, loan EMIs, not defaulting on loans, etc. improve one’s credit score over time.
• FOIR – Another important criterion is the FOIR or Fixed Obligation to Income Ratio of an individual. It is the ratio between one’s income and the total number of debts one has to pay. Ideally, it should stay within 30% to 50%, or else the applicant may have trouble to pay a loan’s EMI and maintain his/her daily expenses at the same time.
Candidates with a lower FOIR are more likely to receive an unsecured loan for chartered accountants. A lower FOIR rating also allows a borrower to negotiate with CA loan interest rates.
• Current liabilities – An applicant with no current liabilities are more likely to get approved for a CA loan without collateral. They have a lower risk of defaulting because they don’t have any other payments to make. Borrowers will also be able to pay little higher CA loan interest rates and pay off the debt faster.
Generally, financial institutions prefer an applicant with at least four years of experience to provide an unsecured loan for chartered accountant. A borrower can also improve his/her professional portfolio to be more eligible for an unsecured advance.
• Practice – Candidates with longer work experience are likely to get a loan for chartered accountants without any collateral. An experienced CA has loyal clients, more partnership options and prominent market exposer are some of the ways how a CA firm can cater to a larger client base.
• Firm or office ownership – The applicant should also own a firm or an office, or a house in the area where the financial institution operates.
Several financial institutions offer such financial tools to eligible candidates. Companies like Bajaj Finserv bring attractive CA loan interest rates, flexible tenor, hassle-free application process, quick disbursal, and numerous other features and benefits with their Loan for Chartered Accountants. They also provide pre-approved offers for personal loans, home loans, business loans, and a range of other financial products. Such offers not only simplify the process of availing finance but also help you save on time. You only have to share some essential details online to check your pre-approved offer.
Loan for Chartered Accountants is an ideal financial product to fund a firm’s growth or pay for various personal expenses. The ease of application, availability, and the option to get credit without pledging any collateral make it a simple and time-saving mode of financing for CAs.