As of 2022, there are 3.51 Lakh ICAI-registered chartered accounts in India.
From tax compliance, budget planning, to auditing, and wealth management, CAs offer these professional services across various industrial verticals. Thus, for several thousand Indians, becoming a chartered accountant is a life-long dream.
Once they have secured professional certification, most want to set up their own practices. However, to do so, a sizable influx of funds is needed. Similarly, CAs who already have their own practices know the costs of running, maintaining, and scaling the practice. However, with easily available professional loans for chartered accountants, CAs don’t need to dip into their savings pool to fund these expenses.
ADVERTISEMENT
A professional loan for chartered accountants is tailored to meet their specific business needs. Whether it be business expansion, buying new offices, purchasing office equipment, or meeting their working capital needs - a CA loan can be used to meet varied business needs. Moreover, most lenders offer a hassle-free digital application process, quick approvals, flexible repayment windows, and affordable interest rates for these loans, making them easy credit options.
How To Find the Best Loans for Chartered Accountants
If you’re a chartered accountant looking to scale up your practice or meet business overheads, here’s how you can get the best loan options:
Keep Track of Your Credit Score
Among other things, your loan terms are decided after your CIBIL score is reviewed. So, to unlock favourable loan terms, maintaining a CIBIL score of 750 or above is necessary. A good credit score pegs you as a creditworthy borrower and ensures the lender that you will repay the borrowed sum on time.
Since your CIBIL score tracks your credit ledger, clearing credit card dues on time, capping the credit utilisation ratio to 30%, and closing outstanding loans can help improve this score.
Look for Loans With a Balance Transfer Facility
The best loans for chartered accountants allow you to save on your monthly EMIs and cap your interest payments. If you opt for a professional loan with a balance transfer facility, you can transfer your outstanding loan balance to a different lender.
This feature comes in handy when the new lender is offering better terms and lower interest rates than your current lender. Lower interest rates reduce your EMI burden, lowering your cost of borrowing.
Check Your Loan Amount Eligibility
You are availing of a chartered accountant loan to finance your business needs. So, it's important to ensure that the sanctioned loan amount is sufficient to meet these needs. While most lenders offer professional loan up to ₹50 Lakhs, the amount sanctioned will depend on your income, CIBIL score, and other factors.
Furthermore, you must also ensure that your borrowed sum is well within your affordability range. In other words, you should evaluate your income and then settle on a loan amount. Borrowing a sizable amount when your monthly income is unsteady can lead to missed payments, penalties, and even defaulting on the loan.
Pick the Right Type of Loan
Loans for chartered accountants come in different shapes and forms. In other words, you can find CA loans that are tailored to meet their specific needs. For instance, opting for a flexi business loan might be prudent if you require working capital for your firm. You can withdraw sums per your needs and pay interest only on the withdrawn sum. Generally, lenders offer these loans as an overdraft facility.
However, if you need a lump-sum amount to start your chartered account firm, renovate your existing office or purchase the latest accounting software, you can fall back on term loans. Apart from professional loans, lenders also offer personal, home, and loans against property to chartered accountants. You can apply for an appropriate loan, depending on your funding needs.
Review the Applicable Charges
The best loan for a chartered accountant is one that comes with minimal fees and no hidden charges. Most lenders charge a processing fee of 1%-2% of the loan amount. Lenders also impose penalty fees on missed EMI payments.
While some forego part-prepayment charges, others levy prepayment fees and foreclosure charges on loans for chartered accountants. The rate for each of these overhead varies depending on the lender you pick and can be reviewed from the lender’s website.
Try Alternate Lenders
You don’t have to stick with traditional banks to avail of a chartered accountant loan. All top NBFCs offer professional loans for chartered accountants. The seamless application process, minimal documentation, quick approvals, and speedy disbursals are some of the factors favouring NBFCs.
Moreover, these alternate lenders might be more capable of personalising the loan offer to meet your needs than traditional banks. However, before approaching a bank or NBFC, you should do your due diligence. This entails researching the lender and reviewing their loan terms and credit ratings.
Compare Your Options
Figuring out the best professional loan for a chartered accountant can be daunting. However, comparing your options can help. Instead of settling for the first offer, you should compare offers using lending parameters like interest rates, tenure, etc. Interest rates for chartered accountant loans range from 10%-20%, while tenures can extend from 12 to 84 months. However, these parameters will vary and, thus, need to be compared.
When looking for a loan for chartered accountants, you should begin your search by approaching your current lender. If you have a good relationship with your current lender, you might qualify for pre-approved loans and better terms. Start from there and then add other options to the mix to determine which suits you the best.
Top Lenders Offering Loans to Chartered Accountants
If you want to skip the researching stage and jump to the best lenders, the following list will come in handy. You can simply compare the following lenders to find the best loan for chartered accountants:
Bajaj Finserv
Bajaj Finserv is a leading NBFC offering flexi-term, flexi-hybrid, and term loans to chartered accountants. These customisable unsecured business loans come with a maximum tenure of 8 years and a base interest rate of 11% p.a.
Apart from their simple eligibility criteria, minimum documentation requirements, and speedy 48-hour disbursals, these loans also come with zero hidden charges. With a Bajaj Finserv chartered accountant loan, you can borrow up to ₹55 Lakhs to start your business, finance your working capital needs, or renovate your office.
HDFC Bank
HDFC Bank offers Business Growth loans of up to ₹40 Lakhs (₹50 Lakhs at select locations) to chartered accountants. The amount can be used for office expansion, meeting salary obligations or hiring new talent. The repayment tenure ranges from 12-48 months, while interest rates start from 12.50% p.a.
Axis Bank
Chartered accountants with two years of experience can apply for these business loans and avail of a loan of up to ₹50 Lakhs. Since the applicable ROI is 14.25%, you can repay the unsecured loan comfortably over 48 months. Additionally, the bank offers these loans against zero part-prepayment and foreclosure fee benefits.
IDFC First Bank
Chartered Accountants can build and grow their practices with a loan of up to ₹1 Crore against a pocket-friendly interest rate of 10.50% p.a. The loan is sanctioned against minimum paperwork and doesn’t require collateral. You also enjoy a flexible repayment window extending to a maximum of 84 months.
To Conclude
When it comes to picking the best loan for chartered accountants, there’s no one-size-fits-all norm simply because funding needs differ. However, you can find the suitable loan offers by following the above mentioned tips. With a professional loan for chartered accountants, you can seamlessly grow your practice without worrying about depleting your rainy day reserves.
Subscribe today by clicking the link and stay updated with the latest news!" Click here!
