Things to know about and guide to Professional loan @ Letzbank

Professional loans are usually considered same as business loans but are specially tailor made keeping in view the requirement of professionals in mind. For the purpose of these loans professionals include:-

·         Doctors and dentists

·         Chartered Accountants and accounting firms

·         Chartered Engineers

·         Architects and interior designers

·         Lawyers and attorneys

·         Other consultants and consultancy firms.

Professionals can avail this loan for various purposes that are related to setting up professional place and meeting all expenses associated with setting up of such professional set up. Professional loan can also be used for furthering professional knowledge and forte’. Following list enumerates the various requirements for which this loan can be availed.

·         Buying office property

·         Setting up office including interiors and purchase of furniture

·         Purchase of machinery

·         Machinery equipment including computer and tools

·         Financing foreign trips, seminars, conferences and travels related to profession

·         Undergoing courses and higher studies for strengthening professional knowledge and growth.

Professional loan schemes, just like business loans have the following categories:-

·         Term Loan

Term loan is extended for a specified fixed duration. Professional loans are usually available from one year to up to five years.

·         Working Capital loan

Working Capital loan is an ongoing loan which is extended for bridging a temporary gap between available funds and fund required to run daily operations. There is no fixed duration of the loan and it acts as an additional credit line as and when there is a need. A comprehensive agreement covers such loans specifying cover duration, rate of interest and repayment terms.

·         Overdraft

Overdraft refers to drawing amount over and above your balance in the current account held in the bank. Overdraft facility is also covered under an agreement and as and when there is an overdraft, the balance is shown as negative.

Documents required for Professional loans

For the loan, applicant needs to submit the following documents along with the application:-

·         Copies of membership certificates issued by the relevant professional institute or body whose certification the borrower/s hold;

·         Registration of firm’s or proprietorship’s registration with such professional institute or body;

·         Documents like copies of PAN card, Aadhaar Card, Voter’s Id, driving license and Passport. In case of partnership, HUF, company or a group of persons, documents pertaining to each of the partners, directors, owners, founders, guarantors.

·         PAN card, Aadhaar Card, Passport, Voter’s Id, driving license, electricity bills, bank passbook and telephone bill. In case of partnership, HUF, company or a group of persons, documents pertaining to each of the partners, directors, owners, founders, guarantors as well as business address (if exists). Latter is obtained from Memorandum and Articles of Association in case of companies and rent, purchase or lease agreement in other cases.

  

·         Partnership deed, Certification of Incorporation, Establishment certificates.

·   Audited financial statements of past years, current year’s budget, performance till date and projections and Income Tax Returns.

·         Bank statements for past period.

·         A detailed statement of type and purpose of expenditure for which loan is required.

Things to Consider before taking Professional loan

·         Estimate your approximate requirement and avail the amount you need to. Lesser than required will hamper your operations and more than required will simply be a bigger financial commitment to be repaid;

·         Take a loan that suits your requirement. If you want loan for running your daily operations then opt for working capital loan or overdraft whereas an investment in capital asset should be serviced by a term loan.

·         Arrive at the term of loan after considering your repayment capacity;

·         Check on the amount of foreclosure charges/ penalty, default penalty, processing and application fees as these charges can eat away a significant part of your loan amount.

·         Make sure the terms and conditions of loan do not include clauses that would limit or hamper your existing business and plans for future.

Professional loans at Letzbank

Letzbank offers professional loan for a maximum amount of Rs. 30 lakhs with tenure up to 60 month (5 years).  You can also check your eligibility criteria on our calculator which uses information like date of Birth, business type, profession, Year of passing out, current total EMIs, Income as per ITR etc to arrive at a borrower’s eligibility for professional loan.  We also offer loan with no foreclosure charges so that you have freedom to repay it as and when cash flows are abundant. After all why pay extra interest when you can close your loan beforehand.