Loans for Lawyers in India
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.
Professional/Business Loans For Lawyers
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.
Key Features of Professional Loans
- Professional loans are mostly term loans.
- Only self-employed non-salaried individuals are eligible for this loan.
- The reason for availing this loan can be for purchase of equipment, machinery, computers, furniture, vehicles and office equipment.
- This loan can be taken to fund foreign trips, organize seminars and conferences.
- Most banks require applicants to have a business/professional record of 3 to 4 years.
- The tenure for loan repayment is usually 60 months with a holiday period of 6 months.
Top Banks offering Loans for Lawyers
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 |
Andhra Bank Professional Loan | Rs.10 lakh | 13.5% | 1 year | 60 months | 0.50% of loan amount |
Eligibility Criteria for Professional Loan for Lawyers
- Between 25 to 65 years of age.
- Annual income of more than Rs.1 lakh.
- 3 to 5 years of experience as a working professional.
- Registered member of the Bar Council.
- Assesse under Income Tax at least for the last 2 years.
- Individual law practitioner, proprietor, a partner in a law firm or the owner of a legal business.
- Earning a profitable income in the profession for the past 2 years.
Documentation Requirements
- Qualification proof of the highest degree in law.
- PAN Card - For Company/Firm/individual.
- Identity Proof: Aadhar Card/Voters ID/Passport/Pan Card/Driving License.
- Address Proof: Aadhar Card/Voters ID/Passport/Driving License.
- Bank Statement for the last 6 months.
- Latest IT returns with computed income, profit and loss account for the past 2 years, and balance sheet for the last 3 months and audited/CA certified financials.
- Other Mandatory Documents (Sole Propriety Declaration/Certified Copy of Partnership Deed.
- Copy of Law Firm registration certificate/Membership certificate of Bar Council.
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.
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