Things Important for Every Professional CA while Applying for a Loan



There are 4 types of loans for chartered accountants that you can avail in India – personal loans, business loans, loans against property, and home loans. 

Several financial institutions provide such loans to CAs wherein the loan quantum, as well as the associated terms and conditions, are tailored to meet every financial requirement that a chartered accountant may have.

The demand for chartered accountants has been growing at a phenomenal rate since the implementation of Goods and Services Tax in 2017. 

With the limited number of CAs in India and their instrumental role in every industry in India, chartered accountancy is one of the most demanding professions in India. 

Henceforth, chartered accountants can apply for a CA loan to capitalise on such a growing market with their independent practice or start their firm. 

Additionally, they can utilise these loans for their personal requirements such as vacation, wedding, or child’s education.

Regardless, there are certain factors which such professionals should take into consideration when they apply for a professional loan.

Factors to consider before applying for a CA loan

The factors which a professional chartered accountant should duly consider and assess before availing a professional loan include –

  • Eligibility criteria

Every financial institution has a certain set of eligibility criteria in place to gauge the loan terms, conditions, and approval for every borrower. These criteria marginally differ from one financial institution to another. Professional loans for CAs come with specific eligibility criteria for such professionals.

A few standard criteria common between financers –

  • The applicant should have a minimum credit score of 750.
  • An applicant must have a documented 4 years of practice to his/her name.
  • An applicant should hold a property, residential or commercial, to his /her name in the area where such financer operates.

Chartered accountants need to satisfy these eligibility criteria to apply for a Loan for Chartered Accountants with reputed financial institutions such as Bajaj Finserv.

  • Documentation

In addition to eligibility criteria, chartered accountants also need to file certain documents to attest to their legitimacy to apply for a professional loan. 

While every financial institution has a differing list of eligibility criteria, a few standard documents which most lenders ask for are –

  • KYC documents – Aadhaar card, Voter ID card, PAN card, driving license (if any), and passport.
  • Certificate of Practice (CoP) which should attest to 4 years of practice.
  • Property ownership papers.

While the list is standard, it is not definitive. Financers can ask for additional documents during the due loan application processing.

  • Credit score

As mentioned earlier, in the eligibility criteria, individuals need to possess a credit score of 750 or above to avail the loan at the best terms. 

It establishes such an individual as a creditworthy borrower. Such score ranges from 300 – 900. 

While certain financial institutions offer loans to professional below 750, such advances may be disbursed with above-average interest rates sans other beneficial repayment terms.

Therefore, individuals should ensure a score above 750 to not only attract a lower interest rate when they apply for a CA loan but also to improve their chances of loan approval. 

In case a chartered accountant has a score below 750, they should aim to improve it. There are a few ways how chartered accountants can increase their CIBIL score such as maintaining a low credit utilisation ratio.

  • Repayment tenor

Depending on the type of loan – secured and unsecured – maximum repayment tenors can be up to 240 months or 60 months, respectively. 

CAs can assess their present financial and future prospects to decide which repayment tenor would suit their affordability. 

They should thoroughly consider their monthly financial expenses and income to reach an informed conclusion. Note that, while a longer tenor lowers the EMI, it increases the payable interest and vice versa.

These are a few essential points which individuals should consider before they apply for a CA loan. While home loans and business loans are usage-bound, personal loans and loans against properties come with unrestricted usage.

Availed funds can be used for a multitude of purposes, chartered accountants can protect their practice against cyber threats by installing state-of-the-art security systems which they can purchase using a business loan or a personal loan for CAs.

These are some of the important things which a CA must consider before availing a loan to enjoy the most beneficial terms and features. Above all, they must plan their finances to ensure proper utilisation of the funds.

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