There are several funding options available in the Indian financial market. You will find regular personal loans or business loans as well as tailor-made loans like Loans for Engineers.
These professional loans come with easy to meet eligibility criteria, higher loan-to-value, and instant approval. Such features make them ideal for salaried engineers, or for self-employed business owners looking to expand their engineering business to new areas.
It is important to know all the necessary information if you are planning to apply for an engineer loan. Not only will it improve the chances of approval but also help you secure a lower rate of interest and a suitable repayment tenor. Let’s take a look.
- 1 Eligibility criteria –
- 2 Interest and fees –
- 3 Repayment plan and required funds
Eligibility criteria –
Different financial institutions will have different eligibility criteria for advances. However, one of the most crucial factors in your CIBIL score and credit history.
Credit history –
Your credit history refers to the log of all your previous loans and is maintained by different credit rating companies in India. They record your repayment history, whether you repaid your dues in time or not, have you defaulted on any payments, etc. A good credit history shows that you are financially responsible and makes you more eligible for a loan.
The credit history is often represented by the CIBIL score. It is a 3-digit score given to individuals by CIBIL that represents the creditworthiness of the person. An applicant with a score of 750 or higher is considered creditworthy.
Before taking a professional loan for engineers, you must check your CIBIL score to know whether you are eligible or not. If the score is not good enough, you can follow some simple tips that can help an engineer increase their CIBIL score.
There are some other eligibility criteria that you should take care of.
Necessary documents and requisites –
To get an engineer loan, you have to be an Indian citizen between 25 to 59 years of age (for a salaried individual) and 26 to 65 years of age (for self-employed personals). Also, you must have 3 years of related work experience or 3 years of business vintage.
You will also need a few documents like –
- KYC documents.
- Engineering degree certificate.
- Bank statement for the last 3 months.
- Recent passport size photograph.
- If you are a salaried individual than salary slip for the last 3 months.
- If you are a self-employed engineer than proof of business vintage.
Interest and fees –
There will be some fees and charges involved when you borrow a loan. Also, you should know the interest rate before applying.
Interest rates –
Generally the interest rate ranges from 14 to 16% for salaried individual and 16 to 19% for self-employed individuals. Such affordable engineer loan interest rates make it easier to avail advances.
Other fees and charges –
Some other fees include – Processing fee (typically about 2% of the loan amount), loan statement charges, outstation collection charges, stamp duty, etc.
Repayment plan and required funds
Prior to applying for a loan, an applicant must use the online EMI calculator and know the EMI amounts. This will ensure timely payments of instalments without any worries. Applicants must also:
Consider the right loan amount –
Another thing you should consider before taking a loan is the number of funds you require. Make a list of all your needs and prioritise them to arrive at the amount.
Create a repayment plan –
Prepare a repayment plan before borrowing. Ensure that your income supports EMI payments; also you can create a budget that will help you manage your daily expenses and repayments. Consider other financial obligations and debt repayments before borrowing a professional loan.
Availing a loan can be a significant financial decision. If you consider the above-mentioned points, you can avail the best loan for engineers available in the market and repay the EMIs easily.
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