As per the Finance Department of India report, professionals like lawyers, doctors, etc., are now eligible to acquire funds for business purposes within the bounds of Emergency Credit Line Guarantee Schemes. Under this scheme, a loan amount of Rs.1.36 lakh crore was sanctioned until July 2020.
To be eligible for the credit, borrowers need to fulfil stringent eligibility criteria. Alternatively, borrowers can choose a professional loan for doctors extended by reputed NBFCs or any other financial institution. Borrowers need to avoid a few mistakes that can wreak havoc in a doctor’s professional life.
Common mistakes to avoid while availing doctor loan
Like any other credit, a doctor’s loan is an essential financial liability that must be managed efficiently. Otherwise, it can become financially strenuous to repay the due within the tenor, which severely influences the credit score. Here are some of the major mistakes that you need to avoid during doctor loan applications.
Not estimating the required loan amount- It is crucial to assess the financial requirement before opting for a loan for doctors. This will ensure that borrowers don’t fall short on funds or end up over-borrowing. Over-borrowing can induce additional financial stress on the borrowers. On the other hand, there is no significance of borrowing insufficient credit that does fulfil the purpose. Hence, it is essential to do proper financial planning before availing of professional loan services.
Ignoring credit score- Credit score plays a vital role in determining the doctors’ acceptability for a professional loan. Since it indicates the repayment capability of a borrower, it is important to keep track of a credit score and improve it over time. For instance, a borrower needs to maintain a credit score of 750 or above to negotiate better with their financial lender for a better rate of interest.
Moreover, lenders offer favourable terms for borrowers with a high credit score. They can also follow some essential tips on what should doctors do with a low credit score if they do not hold a required rating for such a loan application.
Choosing a lender without comparing- Apart from checking eligibility, selecting the right lender is equally important before applying for a professional loan for doctors. One must conduct thorough research regarding multiple lenders available in the market and choose the best one that levies the most favourable interest rate.
Some reputed financial institutions like Bajaj Finserv provide a Flexi-loan facility to withdraw the amount in parts as per borrowers’ requirements and pay interest only on this amount. They also extend pre-approved offers that simplify the loan application process and make it prompt. These offers can be accessed on business loans, personal loans, credit cards, etc. A prospective applicant can check their pre-approved offer by submitting their essential information.
Not planning the repayments in advance – Planning your finances efficiently is an important part of availing any credit. Before applying, a borrower must ensure that he/she has means and capability to repay the loan amount throughout the tenor. This will allow borrowers to choose the right amount and tenor. Alternatively, they can use an online EMI calculator available on any financial lender’s website to have a fair idea about the EMI amount to be paid.
Therefore, these are the mistakes doctors must avoid while applying for a loan. Moreover, they should know about the upgraded equipment and latest technology that will allow them to expand their professional space.