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About Loans for Chartered Accountants

Chartered accountants have the option of joining an established firm / company or opening their own practice. The growing number of professionals within the chartered accountant stream has led to many banks and financial institutions introducing separate loan scheme for Chartered accountants alone. A Chartered Accountant’s business is service oriented and would provide advice, audit accounts and prepare trustworthy information and financial records for their clients. The business would essentially start off with limited working capital, if the individual decides to achieve economies of scale, there is a need for additional working capital to extend the office, bring in required equipment and furniture etc.

These loans are designed to be disbursed with minimal formality and processing. The lending happens on a digital platform which enables quick disbursal of loan.

Features of Loans for Chartered Accountants

The key features of loans provided to Chartered Accountants are –

  • Quick and hassle-free loan processing :
  • The entire loan processing has been simplified and is digital. There is a need to fill up basic request form which should not consume more than 15 minutes. Documents can be submitted digitally as well. The verification happens with personnel visiting the customer to assess the authenticity of the documents.

  • Unsecured loan :
  • A chartered accountant’s practice is service oriented; the underlying business cannot be pledged as security. Thus, the loans extended here are purely based on the academic credentials and credit score of the individual. The loans are unsecured in nature. However, as compared to personal loan their processing is much quicker. Also, the interest rates are more favorable.

  • Minimal documentation :
  • Although this is an unsecured loan, the documentation required is not lengthy and elaborate. The documents can be uploaded online and the verification is provided by banks and financial institutions as a door-to-door facility.

  • Flexible repayment options :
  • Depending on the type of finance availed, a suitable repayment tenure can be chosen. Typically, these loans have a tenure ranging between 1 year –5years. However, they follow the EMI (Equated Monthly Installment) schedule.

  • The processing fee averages around 2% across most financial institutions and banks, some financial institutions and banks may charge a nominal fee for the online convenience that they provide.
  • Most financial institutions provide loan to the extent of Rs. 35 Lakh or Rs. 50 Lakh
  • The lenders have streamlined the entire process so effectively that the loan is advanced in 24 hours.
  • The loan may also be provided in the form of an overdraft facility for a fixed tenure. In such a case, the borrower is required to pay interest only on the funds withdrawn from this account and only for the tenure for which it is withdrawn.

Loan products offered to Chartered Accountants

There are a host of other products apart from the one mentioned above exclusively designed for professionals in this stream of business. These tailor-made products fall in the category of –

  • Personal loan for Chartered Accountants :
  • These loans are similar to the business loan extended, however, their purpose may not be setting up of business and the interest rate may be much higher as compared to the business loan extended. These loans are extended through digital means, they have a simplified documentation and sanction process. The loan tenure can range between 1 year to 5 years. There are pre-approved loans available for borrowers with higher credit score and long-standing relationship with the financial institution. These loans can also be extended as flexi-loans which means that the funds are made available in the form of an overdraft facility. The quantum of loan can range from Rs. 35 Lakh to Rs. 50 Lakh. It can differ from lender to lender. The interest rate on these loans extended exclusively to Chartered Accountants will be lower than the interest rate for others.

  • Business loan for Chartered Accountants :
  • The business loans for Chartered Accountants has been discussed above in great elaboration. These are unsecured loans which are extended basis the academic background and credit worthiness. There is no requirement for external collateral or guarantor. These loans carry lower interest rate as compared to other business loans (especially offered to first generation entrepreneurs who want to establish shops, beauty salons etc. )

  • Home loan for Chartered Accountants :
  • Tailor-made home loans are extended to Chartered Accountants. The quantum of loan that can be availed can be up to Rs. 2 Crores. In some cases, this limit may vary from lender to lender. The tenure can range from 10 years – 30 years. The borrower can also switch existing loan to a lower rate interest home loan to save on EMIs. Top-up loans are also available. Value add services such as property search services, property dossier services are available at the disposal of the borrower.

  • Loan against property for Chartered Accountants :
  • These are secured loans which are customized for Chartered Accountants. They have specialized interest rates based on the property being pledged. Apart from the property being pledged other aspects such as revenue from the practice or salaried derived by the Chartered Accountant will be considered. The credit score also plays a vital role in all types of loans. If these aspects are satisfactory, favorable terms for the loan can be negotiated.

However, popular among these is the business loan which is offered as a separate category among most banks and financial institutions.

Banks offering Loans for Chartered Accountants

Here, the key features of loans offered by various financial institutions for Chartered Accountants is discussed.

Bajaj Finserv Chartered Accountant Loan

  • Offers a suite of products designed specifically for Chartered Accountants, one of which is the business loan for Chartered Accountants
  • Maximum loan quantum is Rs. 35 Lakh
  • Loan tenure can be anywhere between 1 year to 5 years
  • Flexi loan available where the funds are available as an overdraft facility
  • Interest payable on funds withdrawn and for withdrawal period only if it is in the form of flexi loan
  • There is a processing fee and charges for online facilities applicable
  • Penal interest on foreclosure and default on EMI is applicable as mandated from time-to-time

ICICI Bank Loan for Chartered Accountants

These loans are extended to enable Chartered Accountants to set up their practice. This includes funding their office premises, furniture, office equipment, computers and accessories. The scheme also allows Chartered accountants to use part of the loan for working capital requirement. These schemes are allowed for fresh CAs as well, there is no requirement for CAs to have minimum experience to avail this loan. Key features of the loans extended for CAs are –

  • Loan quantum up to Rs. 40 Lakhs is available
  • Interest rates for loans offered to CAs are favorable as compared to other types of business loans
  • It is an unsecured loan
  • Loan can be used for short-term working capital requirements, small infrastructure purchase, office renovation etc.
  • Easy loan repayment through Auto Debit or online payment through net banking
  • Loan tenure can be between 1 year – 5 years

HDFC Bank’s loans for professionals including Chartered Accountants

HDFC Bank offers loans to professionals such as doctors, architects, CAs etc. There are minute customizations applicable on loans extended to Chartered Accountants. Often the interest rates are favorable for setup of business practice of CAs as compared to other business setups such as shops, beauty salon etc. The key features are –

  • Borrowers can check for loan eligibility through online means such as SMS, Phone Banking, Webchat and Click2talk
  • Loan quantum can be upto Rs. 50 Lakhs
  • Loan tenure can be between 1 year – 5 years
  • Loan has a credit protect insurance plan by default. In the unfortunate event of death of the borrower, the outstanding loan does not pass on to the survivors (family members)
  • Existing professional loans can be transferred to HDFC Bank at a preferential interest rate of 12.99% per annum
  • Processing fee of 0.99% of loan amount is applicable on transfer of loans

Loans for Chartered Accountants enable more individuals to become first-generation entrepreneurs. Based on good credit score, the Chartered Accountants can negotiate favorable terms. Further, loans can be availed for working capital purposes as well.

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