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6 Aspects to Know Before Applying for A Chartered Accountant Loan

Finance

A loan for chartered accountants is specially formulated to serve the business expenses smoothly. Leading financial institutions offer this loan to professionals or practising chartered accountants (CA) on meeting the set eligibility criteria.

To avail maximum benefits from this credit instrument, applicants must keep in mind all its related factors.

6 aspects to remember before applying for a CA loan 

A CA can opt for a professional loan to expand his/her business, buy equipment, bridge working capital etc. However, before applying for this credit instrument, one must consider the following aspects:

  1. Loan amount

The loan amount is sanctioned to a CA, based on his/her credit history. Besides a good repayment history, maintaining a CIBIL score of 750 and above is always beneficial in gaining substantial credit against an affordable interest rate. This makes loan repayment easy and manageable.

  1. Repayment tenor

A loan for chartered accountants comes with a longer repayment tenor, differing from lender to lender. However, loan tenor impacts the rate of interest. The longer the tenor, the higher is the interest outgo. One should opt for a suitable tenor that matches his/her financial capability. 

  1. Interest rate

Professional loan interest rates are comparatively lower than other credit forms. However, the interest rate levied is dependent on an applicant’s CIBIL score and chosen tenor.

Leading financial institution, like Bajaj Finserv, offers added benefits to make repayment process easy: 

  • Flexi interest rates allow paying EMIs only on the withdrawn amount and not on the total principal taken. 
  • Allows personalising the EMIs schedules as per the financial situation of the CA firm.
  • Comparatively lower interest rates.

Therefore, before availing a CA loan, one should check the terms and conditions and additional charges like foreclosure, pre-part payment, etc., to get the best deal.

  1. No requirement of collaterals 

If you are considering a chartered accountant loan for your firm, you do not require pledging any collateral. It is an unsecured credit form offering competitive professional loan interest rates. Lenders check the documents submitted and business revenue to sanction the loan amount.

  1. Minimum documentation

Minimum documents make this credit option all the more favourable. Though the documents required may vary with lenders, some of the common ones are:

  • Business proof – Certificate of qualified CA, licence of practice, partnership deed, Shop Act Licence, MOA, etc.
  • KYC of the CA owner – Aadhaar Card, PAN Card, Driving licence, or Voter Card.
  • Address proof – Utility bill, rent agreement, property purchase agreement, Ration Card, Aadhaar Card, etc.
  • Income proof – Latest ITR, bank statement of last 6 months, audited balance sheet of last financial year, profit and loss statement.

  1. Eligibility criteria

The eligibility criteria for CA loans are minimal and easy to meet. Again, the parameters may differ with lenders; however, the following are common to most:

  • Minimum 4 years of work experience on Certificate of Practice (CoP).
  • Should have a certificate of practice.
  • Annual income should be a minimum of Rs.1 lakh.
  • Good CIBIL score.

Moreover, online loan application process has made it easier for borrowers to avail funds in no time. It has further simplified the process to access one’s loan account as and when required. Tracking loan status; availability, cost of borrowing, application process is just a click away with this online account management facility. 

All business loans feature tax exemption benefits. The amount paid as interest gets deducted from taxable income. Also, there are certain exemptions based on the profits earned through the investment of the loan amount.   

Professionals can also gain personalized features and services with leading NBFCs, such as Bajaj Finserv. It extends pre-approved offers, making the loan application swift and easy. These offers are levied on financial products like personal loans, business loans, etc. Check your pre-approved offer by entering your name and contact number.

A CA is already informed about various financial terminologies and cost factors accompanied by the loan. Before availing a loan for chartered accountants, understanding how to get the best CA loan interest rate will help in making an informed borrowing decision. Various financial institutions extend different offers to meet market competitions. However, researching details about the mentioned parameters will be helpful in choosing the right lender.

Uneeb Khan

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