How does a Lender View your Chartered Accountant Loan Application?

Chartered accountants in this country are eligible to apply for CA loans, provided they meet specific eligibility criteria. Generally, lenders consider credit history, loan repayment abilities, creditworthiness, etc. of an applicant and scrutinise a CA loan application minutely before approving it.

So, if you want to apply for such a professional loan, you must check out the different aspects a lender considers before approving a loan application.

Financial history of an applicant

Every financial institution checks an applicant’s financial history to evaluate if he/she is creditworthy. Several aspects play a crucial role in determining whether you are eligible for a loan or not. Some of those include –

FOIR – Fixed Obligation to Income Ratio represents the ratio of an individual’s debts with respect to his or her income. FOIR should not exceed more than 40%. Otherwise, you may find it difficult to pay the EMIs.

Try to maintain the ratio within 30-40% before you apply for a CA loan. Lenders will consider you creditworthy if your FOIR is within this threshold. Maintaining a low FOIR ratio also increases your credit score in the long run.

Liabilities – The number of existing debts or other liabilities is another factor that a lender views when you apply for a loan for a chartered accountant. Too many debts will strain your budget and can make it difficult to repay the loan.

Repayment history – How a borrower handles his or her finances plays a vital role in approving a CA loan. Ideally, you should have a history of timely repayment and no records of defaulting on any previous debt.

Also, you must not place too many credit requests within a short span. Ideally, avoid applying for multiple credits within six months from an application or paying off a debt. Lenders may consider you as credit hungry if you apply for too many loans within a short period.

Repayment capability

Lenders carefully assess your repayment capability to decide whether you can pay off the debt within the given tenor or not. Repayment capability depends on your present monthly income and the amount you pay for various personal and professional overhead expenses, credit card debts, existing loans, etc. Lenders often come with a pre-set threshold that you must meet to avail a CA loan.

One mistake you should avoid while taking CA loans is to apply for a credit that does not serve your purpose or come with a high EMI straining your budget. Choose a financial company which offers affordable CA loan interest rates and flexible repayment tenors. That will allow you to spread the loan EMIs according to your convenience.

Purpose of the loan

Financial institutions often view the purpose of taking a loan when a borrower submits an application. You should clearly define your requirements (personal or business) and apply for a financial product that serves your needs.

Most lenders offer loan for chartered accountants in different variants to meet diverse requirements. You can avail a personal loan to pay for large expenses like family ceremony, wedding, overseas education, vacation, etc. You can also consider a chartered accountant loan for your business to expand. You can pay for new assets, boost working capital, bear operational expenses, or even finance the firm’s overall growth.

How to select a lender?

You should carefully consider all your options and perform thorough market research before you select a lender to avail a CA loan. Select an organisation that offers an adequate sum of money, affordable interest rate, minimum fees and charges, and additional features and benefits that might help with repaying the credit.

Companies like Bajaj Finserv offer many such facilities like up to Rs. 35 Lakh as personal or business loan for CAs, flexible repayment tenor, online account management, etc. They also provide pre-approved offers for personal loans, home loans, business loans, and a range of other financial products. Such offers simplify the process of availing finance and help you save time. You only have to share some necessary details to check your pre-approved offer.

Now that you know what lenders check in an application, keep these factors in mind while applying for one to increase your chances of loan approval.