CA loans are small loan specially designed for chartered accountants who are looking for funds that can be used for various purposes. Chartered accountant loan is a type of professional loan, but the terms and conditions of the loan for CAs make it different from personal loans.
Chartered accountant loans can be beneficial in many ways such as; it does not require collateral for loan approval. The process of the loan is easy, and there are instant loan approvals for Chartered accountant loans. The amount offered in CA loans is much higher than the personal loans, i.e. INR 30 Lakh. There are Non-Banking Financial Companies (NBFCs) that offer the options like adjustable EMI and adjustable tenor.
These benefits can seem too good to be true, but in order to avail a chartered accountant loan, you need to be eligible for the loan according to the lender. The eligibility of an applicant is determined by the parameters set by the lender. In order to get your chartered accountant loan approved and sanctioned, you need to qualify through the eligibility criteria for CA loan as set by the lender.
These are the factors that affect your chartered accountant loan eligibility
A credit score or a CIBIL score plays an important role for the loan approval. Due to the lack of security interim, the lender refers to the credit score of the applicant. A credit score is the points that are given to the applicant based on his previous loan repayments. The ideal credit score for a loan approval is 750 points. If you have a lower credit score, you can apply for a chartered accountant loan through an NBFC as they provide a loan to the people with low credit score also.
Income plays a vital role in a CA loan; as the loan has to be paid in equated monthly instalments (EMIs), it is necessary that your income should match the lender’s requirements. For your EMIs, your monthly income is analysed with necessary monthly expense deductions, and then the remaining amount is considered as EMI for the loan repayment. This analysis is called the debt to income ratio analysis.
In order to avoid default in EMI payments, the lenders check the employment history of the applicant to make sure that the loan will be repaid. In simple words, the employment history of the applicant is another guarantee or proof of loan repayment. In order to qualify for a chartered accountant loan, the applicant must have at least 3 years of working experience in any company.
Many lenders ask for the banking history of the applicant when approving the loan. The applicant is asked to provide bank account statement of at least 6 months when submitting the application form. The reason behind this is the lenders check your banking history for any returned cheques or failed transaction which is a key sign of defaulters.
It is very important that you keep the following things in check before applying for a CA loan. You can also take the help of the CA loan eligibility calculator.
Anuj Pandey is an experienced financial advisor and writer who is well known for his ability to market trends as well as for his financial knowledge. He has worked extensively in the finance sector and also written numerous blogs on finance like Business Loan, CA Loan, Engineer Loan etc. And how they affect the customer in the present market scenario. He has done MBA in finance. Anuj has also amassed a great name for himself as a financial blogger.