Unlike salaried individuals, self-employed professionals do not have a fixed monthly income. Doctors, Chartered Accountants, Lawyers, Dentists, Architects, all fall under the ambit of self-employed professionals. So, in spite of having robust incomes, sometimes banks and financial institutions hesitate to extend loans to professionals.
The worst victims of this veiled discrimination are perhaps lawyers and advocates, especially if they are still in early days of their careers. In fact, the situation was so grave around 5 years back that lawyers had to take it upon themselves to look out for their own. The Bar Council of Maharashtra and Goa formed a multi-state multi-purpose co-op credit society to help young lawyers get small loans.
Experienced lawyers can, however, easily get professional loans from numerous banks and financial institutions. Most banks have a provision to extend professional loans to individuals with non-salaried income, sometimes also termed as business loans.
|Bank/Loan||Max Amount||Rate of Interest||Moratorium Period||Repayment Period (Max)||Processing Fees|
|HDFC’s Loans for professionals||Rs.20 lakh||14.50% to 15.50%||NA||60 months||Up to 2.50% of the loan amount|
|Karur Vasya Bank’s Loan for Working Professionals||Rs.1 crore||MCLR + 3.35% = 13.25%||6 months||60 months||0.30% of loan amount|
|OBC’s Scheme for Loans to Professionals (Other than Doctors)||Rs.20 lakh||11.45% to 13.45%||6 months||84 months||0.50% of loan amount|
|ICICI’s Business Instalment Loan||Rs.15 lakh (without audited financials) Rs.40 lakh (with audited financials)||11.49% to 18.49%||NA||60 months||2.5% of loan amount|
|Andhra Bank Professional Loan||Rs.10 lakh||13.5%||1 year||60 months||0.50% of loan amount|
Please note that the list of documents provided is indicative. Different banks might require you to submit other kind of documents.
Lawyers can use the money got through professional loan to establish a new practice, set up an office, present papers at prestigious law seminars and fulfill all other professional needs. So don’t hesitate to apply for a loan in fear of rejection if you are hard up for cash.