How To Choose The Right Engineer Loan Provider
Once you have decided to ply your business with a professional loan for engineers, it is important that you select the right lender. This will ensure that your borrowing experience is affordable and stress-free.
Here are nine questions to ask before selecting a loan provider:
Do I meet the eligibility requirements?
The first thing you should do is check the various lenders and the eligibility criteria that they have set. Matching the criteria is the initial requirement that you need to meet when applying for a loan. Since a loan for engineers is customised for professionals like you, meeting the eligibility criteria is simple.
All you have to ensure is that:
- You are a self-employed or consultant engineer.
- You have at least three years of self-employed experience and five years of vintage experience since graduation.
- You are between 26 to 65 years of age.
Do I need to pledge assets as collateral?
It is important to decide whether you need a secured or an unsecured loan. The former requires you to pledge a collateral in exchange for the loan, while the latter doesn’t. Based on whether you have the assets and wish to take the risk, you can opt for a loan accordingly. An unsecured loan for engineers is the ideal financing option for those who don’t want to risk/pledge their assets and want a hassle-free loan experience.
Do I get a high loan amount?
This question should rank high in your list. Simply put, if a lender is not willing to sanction the amount that you need, he shouldn’t be a lender that you consider. A financial institution that is reluctant to offer a high loan amount may also charge you a more expensive rate of interest. So, it is in your best interests to choose a lender who is willingly offering a high loan amount.
Lenders give you a high loan amount based on your CIBIL score, your business vintage and years of experience. If your CIBIL score is low, you can increase it by ensuring that you make timely payments on your loans and credit card outstandings (there shouldn’t be any delays or defaults in payments), avoid applying for loans or credit cards from multiple credit providers simultaneously, limit the usage of your credit card. Bajaj Finserv offers unsecured loans for engineers of upto Rs. 15 lakhs.
Do I have to provide documents for the loan to be approved?
Extensive documentation makes the loan application process lengthy and cumbersome. If you’re in a hurry to get the funds, it is better to pick a lender that has minimal documentation. A loan for engineers, fortunately, requires only a few documents to be submitted. The idea is to get quick funding based on your engineering credentials.
The documents required for this loan are as follows:
- Duly-filled application form
- Your photographs
- KYC documents (of both applicants in case of a joint loan)
- Business vintage for 3 years
- Certificate of practice as proof of your business
- Details of your engineering degree
What is the interest rate?
The most important factor that separates one lender from another is the interest rate offered. Make sure your lender is offering an economical interest rate. A loan for engineers has a low and fixed interest rate, making it convenient to repay. This also helps you preserve your income or profit, instead of having to spend it on EMIs.
Does the loan have a prepayment charge?
Prepayment towards the principal reduces your overall financial liability. But, if you have to pay a hefty fee, the cost goes up and cancels out the benefit. So, it is important that you check with your lender if there are prepayment charges and calculate how high they can go.
Usually, an engineer loan doesn’t put this burden on you. It is free of any part prepayment charge, which adds to its affordability. Sometimes, a loan has no prepayment charge when it has an individual floating rate of interest. But, with a fixed interest rate, a minimal 2% prepayment charge is applicable. Paying attention to these small details is what makes all the difference. Bajaj Finserv offers Flexi Loans which are given to engineers at no part pre-payment charges where they get flexible repayment options.
What are the other fees and charges and can I afford them?
As a borrower, you must be mindful of the extra fees and charges associated with the loan to gauge its affordability. The processing fee for this loan is 2% of the loan amount, which isn’t eye-wateringly expensive. But, be sure to do the math before signing the dotted line! Sometimes, even a seemingly small percentage can cost you your precious funds. Loans for engineers have basic fees and charges.
What is the maximum tenor available for repayment?
Why is being aware of the loan tenor important? Simply because the longer the tenor, the lower your EMIs, and vice versa. For a loan for engineers, the ideal tenor is up to 60 months. This is useful to you as you can choose your repayment term based on your financial status.
How quickly can I get the loan amount?
Application, approval and disbursal of a loan can take a while. If you’re in dire need of funds, this may throw a spanner in the works. This is why it is imperative that you speak to your lender about timelines. When you opt for a loan for engineers, the aim is to address urgent needs as well. So, the approval takes as little as two hours if you apply online and disbursal happens within 72 hours.
Once you learn the answers to these questions, you will be able to select the right engineer loan provider with ease.