How Difficult is it to Get a Chartered Accountant Loan?

Chartered accountant loans are a collection of secured and unsecured loans designed precisely to address the various financial needs of CAs.
Secured loans include:

How Difficult is it to Get a Chartered Accountant Loan?

       Home loans, specifically available to purchase/construct a house.
       Loans against property, available to help CAs to meet high-end expenses.

Unsecured loans include:

       Personal loans, an unsecured alternative to loan against property.
       Business loans, available to help CAs run their practice smoothly.
Customers looking for chartered accountant loan have a perception that these loans are difficult to avail. Well, the procedure to apply and receive these loans became considerably easier, thanks to NBFCs and their online procedures. These financial companies ensure quick approval and disbursal of CA loans to meet urgent monetary needs.
NBFCs can approve any of these loans within 24 hours provided you do the following:

  1. Produce all the necessary documents

Lenders require your Certificate of Practice, KYC documents (Passport, Voter ID, Aadhaar, Driving License, PAN, etc.), and bank account statements mandatorily.
You need to submit the following to avail secured loans in addition to the above:

       Income tax returns for the last 2 years.
       Profit & Loss Account statement and Balance Sheet of the previous 2 years.
       Documents of the property you want to mortgage.
Note that NBFCs may need you to produce additional documents.

  1. Fulfill the eligibility criteria

You only need to fulfill two eligibility criteria:

a)      Hold a Certificate of Practise that is active for at least 4 years.
b)      Own an office or a house where the lender operates.

  1. Possess a good credit score

A credit score of 750 or more is compulsory if you seek to avail unsecured loans for a chartered accountant. As these loans are collateral-free, a high CIBIL score is an important aspect with which lenders determine your creditworthiness and ability to repay the loan.

CAs can follow a few tips to increase their CIBIL score and become eligible for an unsecured loan. 

  1. Have minimal monthly debt obligations

NBFCs prefer customers whose monthly debt obligations are not more than 50% of their income. They may look into your debt-to-income ratio or Fixed Obligations to Income Ratio (FOIR) to verify the same.

Generally, you have a higher chance of loan approval if you foreclose any existing loans and pay off your credit card debts.

Approach an NBFC to apply for a CA loan only after you meet all the above criteria. Doing so enables the lender to approve your application within one working day.

Features you enjoy with a CA loan:

  1. Ample funds to help you meet your commitments
Secured loans for a chartered accountant can come up to Rs. 2 Crore. On the other hand, unsecured loans provide you up to Rs. 30 Lakh.

  1. Repayment periods that don’t make these loans a burden
The tenors for secured loans can go up to 20 years. Unsecured loans come with tenors of up to 60 months. NBFCs offer abundant time to repay, no matter you avail a lump sum amount or a smaller fund. Make sure to choose your repayment schedule conveniently.

  1. Pre-approved offers to eliminate any hassle
One of the most reliable NBFCs of India, Bajaj Finserv comes with pre-approved offers to make the procedure of getting finance less complicated and more time-saving. These pre-approved offers are valid on business loans, personal loans, home loans, and several other financial products and services. You can have a look at your pre-approved offer by providing only your essential details.

  1. Balance transfer facility
Lenders also allow you to transfer the balance of your existing loan to any other company against nominal fees. You may opt for a balance transfer when any other lender offers considerably lower CA loan interest rates. Thus, you make your EMIs more affordable.

You may also be eligible to receive a high-value top-up loan when you avail the balance transfer facility. 

However, do make sure to check the different fees and charges involved with a CA loan before you apply.

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