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Questions to Ask Before Applying for A Chartered Accountant Loan

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Owing to market-friendly policies by the Government of India in recent years, more businesses and start-ups are being established. 

In recent years, India’s service sector is severely augmented with a number of professionals eagerly plunging into self-owned ventures rather than a 9-to-5 job. 

Consequently, there has been a significant rise in the demand for chartered accountants. Individuals who are already practising as a CA can tap into this growing demand by investing and expanding their practice with the help of customised credits like chartered accountant loan. 

However, before opting for a loan for chartered accountants, one should ask the following questions – 

  • What are the eligibility criteria of a CA loan?

Before applying for a chartered accountant loan, one should verify whether they are eligible to avail the same or not. It will not only help them to avoid future complications but also reduce the chances of rejection, which can affect their credit score. Even though the criteria set by lending institutions may vary, there are some standard parameters that every applicant must adhere to. These include – 

  1. The applicant or his or her parents must own a property in an area where the financial institution operates.
  2. He or she should hold a minimum experience of four years after receiving his or her certificate of practice.
  3. Applicants should be a residential citizen of India.

Additionally, to ensure chances of approval for a loan for chartered accountant, borrowers can use online tools like eligibility calculator offered by leading financial institutions. These tools can also be used to compute the amount an applicant can qualify for before applying. To estimate the qualifying amount, applicants need to enter the following values into this online tool – 

  • Date of birth
  • Name of the city they are residing in currently 
  • Total monthly income 
  • Value of overall monthly obligations

Based on the sum displayed in the calculator, borrowers can therefore decide the final loan amount that they can apply for from a lending institution.

Applicants should also look out for deals, such as pre-approved offers extended by leading financial institutions like Bajaj Finserv, which reduce the hassle of application and streamline the loan application procedure. Besides professional loans, these offers can be availed on multiple financial products like business loans, personal loans, etc. One can quickly check their pre-approved offers by entering only some essential information like their name and contact information.

  • What are the documents required during the application procedure?

Applicants are also required to submit a few essential documents while applying for a professional loan for verification. The list of documents are given below – 

  • KYC documents which include valid address and identity proof, such as Voter ID, Aadhaar, PAN, Driving license, passport, etc.
  • Certificate of practise.
  • Documents for proof of property ownership.
  • Bank account statements.

However, one should keep in mind that besides the ones mentioned here, a lending institution may ask for other relevant documents as well. 

  • What are the applicable interest rates?

Borrowers should conduct thorough research on interest rates and terms offered by lending institutions before availing a loan for chartered accountant. To this end, one can also use a loan EMI calculator where they can adjust the loan amount and tenor to calculate a suitable monthly instalment amount. 

Moreover, borrowers can also adopt several measures like maintaining a credit utilisation ratio lower than 30%, reducing FOIR, maintaining a high CIBIL score etc. to get the best CA loan interest rate.

  • Are there any additional fees and charges required?

Besides interest rates, lending institutions levy certain fees and charges on professional loan for chartered accountant. Hence, before applying for a loan, borrowers must have a thorough idea of the same. Some of the standard fees applicable includes – 

  • Processing fee.
  • Document or statement charges.
  • Document processing charges. 
  • Penal interest. 
  • Bounce charges. 

One should have a thorough idea of these fees and charges since they can increase the overall cost of the credit. 

While applying for a loan for chartered accountants, one should also check the additional features and benefits offered by lending Institutions. For instance, some financial institutions and NBFCs offer features like flexi-loan facility, which allows borrowers to withdraw only the required amount and pay interest on the same. Hence, one can easily fund their CA firm’s working capital needs with a flexi loan. Individuals should also consider applying for a CA loan with a financial institution that provides online account management facilities.

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