Setting up or expanding your medical practice, buying new equipment, or renovating your clinic requires access to funds. To finance these expenses, you can opt for a doctor loan specifically designed for the needs of healthcare professionals.
However, it is essential to note that your qualifications and experience are a vital requirement if you wish to avail of a medical loan for doctors. Read on to know more about the role of medical degrees, work experience and other factors in your eligibility and how to improve them.
What are Doctor Loans?
Setting up a medical practice in India can be heavy on the pocket, as it may come with a one-time expense of about ₹20 Lakhs. In addition to that, your monthly expenses may extend to up to ₹5 Lakhs or more based on the software, staff and equipment you need.
Setting up a clinic or expanding one into a polyclinic or hospital can further add to your cost, requiring financing of around ₹45-50 Lakhs. This is a huge capital requirement not just for practitioners at the start of the journey, but also for experienced doctors.
A loan for doctors is a credit facility that gives you access to funds to cover these expenses with ease as they are tailored to your profession. However, such loans require you to meet certain eligibility terms to qualify for finance.
Role of Qualification and Work Experience in Doctor Loan Eligibility
One of the primary requirements listed by most lenders under doctor loan eligibility terms is your qualification. This means that you must have a recognised medical degree to qualify for a doctor loan.
Lenders require borrowers to submit proof of their educational qualifications, such as MBBS, MD, BDS, or any other equivalent degree. In addition to this, lenders also require you to have post-qualification experience of a minimum number of years.
While this criterion varies depending on the lender, it generally ranges between one and three years. The reason that lenders are particular about this doctor loan eligibility criteria is that it ensures you are qualified and have the potential to earn revenue.
Since lenders offer simple and affordable terms to medical professionals, they want to be sure you have the repayment capability to pay timely EMIs.
Other Factors that Impact the Eligibility for Loans for Doctors
While eligibility criteria for loans for doctors may vary depending on the lender, these are some of the basic factors you must be aware of:
Your creditworthiness and repayment history are showcased by your credit score. Lenders consider it to assess your financial past and fiscal responsibility. This helps them decide whether or not to provide you with financing.
To be eligible for any kind of loan, you must have a stable source of income. Lenders assess your income to determine your repayment capacity and decide on the loan amount you can get.
Age and Earning Capacity
Age is an important factor when it comes to qualifying for a doctor loan. While all lenders have minimum age requirements, others also set a maximum age limit, after which availing of a loan for doctors becomes harder.
This is also to ensure that you borrow and repay the loan during your earning years.
Clinic or Practice Type
The type of medical practice you have also determines if you qualify for a loan for doctors. For instance, you could be affiliated with a hospital, have an individual practice or run a polyclinic in partnership with others. By studying your ownership and revenue model, lenders assess your repayment capacity.
Providing collateral enhances your doctor loan eligibility. Some lenders require you to put up your assets as security when availing of a large loan amount. Others may require you to apply with a guarantor. However, this depends on the lender you go with.
To avail of a doctor loan, you will also need to furnish the required documentation. This includes your PAN card, Aadhaar card, medical certificate and ITR returns. Your loan request will only be processed when you submit all the required documents.
How to Improve Your Doctor Loan Eligibility
Here is how you can enhance your doctor loan eligibility and improve your chances of getting a loan:
Understand the Doctor Loan Eligibility Criteria
To improve your chances of loan approval, understand the eligibility terms set by the lender. This usually includes your age, income, educational qualifications, credit score, and other factors. This way, you can work to improve them or select the right lender whose terms you can meet.
Maintain a High Credit Score
To avail of a doctor loan at favourable terms, ensure you have a high credit score. This indicates financial stability and assures lenders of your creditworthiness. Most lenders peg 700 as the minimum credit score required when approving doctor loans.
Show Increase in Revenue
By showcasing consistent growth in your income, you can assure lenders of your repayment capacity and ability to manage finances. You can present documentation highlighting your income growth trajectory to enjoy competitive interest rates and high-value financing.
Reduce Your Financial Obligations
Lenders assess your debt-to-income ratio before approving your loan request. So, before applying for a loan for a doctor, clear your existing dues.
You can strengthen your doctor loan application by providing collateral or applying with a guarantor. Both these options provide assurance to the lender.
Select Loans with the Right Amount and Tenure
Opt for loan terms that suit your financial capacity so that you can easily pay off the debt. Overshooting the loan amount or choosing a short tenure may negatively affect your eligibility.
Demonstrate Good Will and Reliability
A stable and long professional track record acts as a positive when you apply for a loan for doctors. Lenders value professional consistency and may offer you better terms in such cases.
With fintech advancements, securing all types of loans has become much more convenient and easier. In the case of a loan for doctors, too, there are various lenders from whom you can get a loan conveniently online.
You can compare different doctor loan offers from the comfort of your home and choose the best one. The application process is quick and simple, and you can complete it in a few steps.
In addition, online lenders generally have less stringent doctor loan eligibility requirements, so you can secure this loan effortlessly.
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