Things To Consider Before Applying For A CA Loan

Things To Consider Before Applying For A CA Loan

There can be times when you might need funds urgently, especially when you have a business to run. Practising your profession independently is always a good idea instead of working under a firm. Although, working in a company can give you the abundant knowledge and a good opportunity to learn, but having your own business can always be a great way to earn success. As a Chartered Accountant (CA), you will, of course, know the importance of finance when it comes to business. It is nearly impossible to practice independently without having any financial backup.

In order to have an independent practice of CA, you require funds. It is not always necessary that you will only require funds during a start-up. You might also need funds if you are planning for an expansion. In such a case, you can borrow a loan to fund your business.

When it comes to loans, both banks, as well as Non-Banking Financial Companies (NBFCs), offer you funds as per your needs. The loan can be an easy way to fund your financial crisis. When loans are considered for a business purpose, you might always think about taking a business loan or a personal loan. These loan options are the most preferred ones in India, but a very few know about CA loans. You can borrow a business loan for a Chartered Accountants consultancy if you are practising CA.

A Business Loan for CA:

In case if you are unaware about “Business loan for CA”, then business loans for CA or CA loans are loans to help Chartered Accountant to carry out their practice smoothly, without any difficulty. A chartered accountant can avail a business loan up to INR 35 lakhs with a low rate of interest. Applying for a CA loan is easy, as you can apply for a CA loan online and can get a quick approval. CA loans are only offered by some NBFCs, not all financial institutions offer business loans for CA.

Before applying for a CA loan it is important that you consider certain things. Following are the things to consider while applying for a CA loan:

Interest Rates:

You can avail maximum benefits on interest rates of business loan for CAs. As mentioned above, CA loans have a low rate of interest so it is easy to repay the EMIs and you will have fewer debts to pay off. As CA loans have a low rate of interest, it is also an ideal option to choose, instead of opting personal loans which charge high-interest rates. As CA loans avail your line of credit, it becomes easy for one to customise the repayment options. Also, the tenor is flexible which ranges from 1 year to 5 years.

Eligibility:

When talking about loans, eligibility is the most important factor to consider. The financial institution will always check your eligibility before approving your loan application. You should be in the career of Chartered Accountant for at least 4-5 years, in order to get a CA loan. You might not be considered eligible for the loan if you have newly entered the field. It is also important that you have a high income in order to get qualified for the loan, plus you must have a property which you own. It is important to check your eligibility before applying for a CA loan.

In case you have a low income or only have experience of 1-2 years in the field of CA, then there are chances that your financial institution might reject your loan application. Although the interest rates are low, one must only avail a CA loan if he is in an extreme need of funds. 

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