A rising number of consumers, including doctors, are now availing personal loans for their purchases, especially the big-ticket ones. Many of them are also converting their purchases into equated monthly installments (EMIs). Be it a foreign trip, sponsoring a child’s higher education, or to meet medical needs, personal loans are of immense help when it comes to meeting any financial shortfall experienced within a household. The following are the factors to be kept in mind when doctors are availing a personal loan-
- Eligibility criteria: although it varies from bank to bank, generally the eligibility for doctor loan include your age, occupation, income, capacity to repay the loan and place of residence. To avail a loan from any financial organization, you must have a regular income source, irrespective of whether you are a salaried individual, self-employed business person, or a working professional. Your credit history will also affect your eligibility.
- Loan duration: It can be 1 to 5 years or 12 to 60 months. You may be allowed shorter or longer tenures, on the basis of a case, though it is exceptional.
- Disbursal of loan amount: typically, it gets disbursed within 7 working days of the loan application to the lender. Once the loan is approved, you may either receive an account payee cheque/draft equal to the loan amount or the money can be deposited automatically into your savings account.
- How much can you borrow: This usually depends on the income of the borrowing doctor and is often based on whether you are salaried or self-employed. Usually, the banks restrict the loan amount such that your EMI is not more than 40-50% of your monthly income.
- From which bank/financial institution should you borrow: It is advisable to compare the offers of different banks before settling on one. Some of the key factors that should be taken into account when choosing a loan provider include interest rates, loan tenure, processing fees, etc.
Personal loans for doctors can be customized according to their requirements to that they can plan effectively and use the money to the optimum advantage. Some financial institutions also provide personal loans to doctors at considerably lower interest rates as compared to interest rates on regular business loans. The easy availability of personal loans for doctors has certainly taken the medical industry by storm, thus paving the way for better healthcare facilities. The following are some of the benefits promised by this type of loan-
- The higher amount of loan as compared to others
- No additional costs involved, such as foreclosure and repayment fees
- Both options of fixed as well as floating rates of interest can be availed
- There is also the option of part payment wherein doctors can repay the loan in parts
- The process of loan sanction is much easier and faster than ordinary personal loans
- The repayment tenure is more relaxing for doctors than any other creditor.
However, it should also be noted that there are certainly other types of charges involved, just like any other personal loan. These are-
- Late repayment charges- The rate depends on the flexibility of the bank rules. However, applicants should make sure not to delay the payment, as it directly affects the credit score and history.
- Loan processing fee- this is a kind of service charge that is mandatory for all applicants. This fee is negotiable and varies from bank to bank.
- Repayment penalty- this is the fee that a borrower has to pay if he/she repays the loan amount before time. Though this sounds a bit confusing, most banks charge a repayment cost if you are availing a huge loan and paying it back before time.
Unlike a home loan or car loan, a personal loan allows the borrower to use the money as per his/her preference and requirement. Besides, since it is an unsecured loan, the borrower is not required to provide any security to the lender in the form of cash, shares of any other asset. It is thus, an instrumental tool in not only managing one’s finance efficiently but also in enabling an individual to implement their plans into actions.