Economists and policymakers around the globe present before us a disturbing statistics of growing unemployment. The Information Technology bloom has transformed the Indian education system and has contributed to rising demand for engineers.
On the other hand, India has witnessed success stories of several engineer turned entrepreneurs. Sachin and Binny Bansal (Flipkart), Kunal Bahl and Rohit Bansal (Snapdeal), and Mukesh Bansal (Myntra) are some of the profound engineers who went on to establish businesses that are currently valued at more than $4 billion.
Their stories might be inspiring, but achieving that position requires crucial planning and most importantly – investment. Banks and NBFCs in India provide engineer loan specifically to those who seek to leave the technical world behind and enter the wilderness of commerce.
However, financial institutions require engineers to have certain eligibility for availing an engineering loan. Some of these eligibilities that an engineer has to fulfil include:
To avail this loan, one has to be an engineer with a valid degree. Further, engineers also have to be employed or self-employed at the time of availing the loan. Banks and NBFCs require an individual to submit all of their relevant certificates and degrees that validate their credentials.
- Work experience
Engineers applying for this loan need to have minimum 3 years of work experience in case salaried. On the other hand, self-employed engineers must be running a business for at least 3 years. This enables a lender to determine the capability of individuals and have a sense of security and trust in them.
- Audited turnovers
Self-employed engineers need to have their business turnover of the previous year audited by a CA.
- Income tax returns
Both salaried and self-employed individuals need to produce their income tax return statements for the last year for availing an engineer loan. Income tax returns ensure that the individual has followed all legal affairs and is credible for the loan.
- CIBIL score
The Credit Information Bureau of India Limited (CIBIL) assigns a credit score to every employed individual. This credit score vouches for the credibility and eligibility of an individual for availing credit.
The credit score is one of the crucial engineer loan eligibility, and it ranges from 300 to 900. Banks and NBFCs like Bajaj Finserv requires a customer to have a credit score of 750 or more for loan sanctioning.
However, if faced with a low credit score, an engineer can follow the steps mentioned below to improve it:
- Repaying EMIs in time – Missing out of an EMI payment will lower the credit score. Hence, one should pay EMIs before their due date.
- Paying the full outstanding credit – Credit cards have a minimum amount which cardholders need to pay to keep it from getting rejected. However, to keep the credit score healthy, they need to repay the full outstanding amount.
- Minimum loan applications – Multiple loan–applications eventually lead to decreased credibility of loan applicants. Hence they restrict number of applications to a minimum.
- Stop loan applications if rejected once – With each loan rejection the score lowers; so, it is recommended to wait for a few months after a rejection before applying for a new loan.
Business loan calculator:
In adherence to the required eligibility criteria for obtaining business loans, leading financial institutions like Bajaj Finserv has introduced an online business loan calculator. This requires some basic information like
- Date of Birth
- Net monthly salary
- Net credit liabilities:
- Proposed tenure
Applications obeying the minimum requirements are issued an estimate of the loan amount he/she is eligible for. However, business loan calculators merely give an estimate of the loan amounts. Interested candidates should provide necessary documents to the loan disbursal team for an even more accurate approximation.
In India, the engineer loan interest rate is competitive and affordable. Numerous individuals are availing an engineer loan, financing their own business, and becoming their superior.