Tips for salaried and self-employed engineers to take a loan
From funds for a wedding or higher education, to working capital financing or funds to purchase latest plant & machinery, an engineer’s loan can deliver the necessary financial support in all situations.
While salaried individuals can avail these loans for their personal expenses, self-employed ones can use the same for their businesses.
Also, an engineer’s loan is one of the ideal financing options individuals can go for during emergencies. Hence, attending to healthcare situations or funding business requirements is considerably beneficial with these loans.
Take a look at these tips before you opt for any one of these loans:
Before you apply –
Consider the following points before you apply for an engineer’s loan –
- Increase your credit score
You will need a credit score of 750 to apply for these loans. Learn how to increase your CIBIL score as it is essential to avail these unsecured loans. It will vouch for your creditworthiness and ensure that you will repay the loan in due time.
Lenders may offer you lower engineer loan interest rate if you hold a credit score higher than 750.
- Have all the necessary documents
Basic documentation required to avail these loans are engineering degree certificate, KYC documents (Aadhaar, Passport, Voter ID, PAN, etc.), and bank account statements of the last 3 months.
Salaried engineers have to provide their salary slips of the previous 3 months. Self-employed engineers have to produce relevant documents as proof of business.
- Fulfil all the eligibility criteria
Satisfy the following eligibility criteria to avail an engineer’s loan –
- You have to between 25 and 59 years.
- You must have a minimum employment experience of 3 years.
- You have to be between 26 and 65 years.
- You must have a minimum business experience of 3 years.
- Lower your monthly debt
Clear your existing loans and credit card debt before you apply. It can increase your chances to have your professional loan application approved.
- Choose the amount carefully
While salaried engineers can avail up to Rs. 25 lakh, self-employed ones can receive up to Rs. 30 Lakh.
Refrain from applying for an unreasonable amount as it can result in the lender declining your application. You can use a loan eligibility calculator to determine the same. Feeding a few numbers to the calculator like your income, outstanding credit card debt, and existing loan EMIs will tell your eligible loan amount.
- Select the right tenor
Salaried and self-employed customers can receive up to 72 months and 60 months as the repayment tenor for a Loan for Engineers.
Do remember that the total interest that you pay on your loan will increase as the tenor increases.
After you apply
- Pay your loan EMIs in time
Pay your loan EMIs in time to avoid late payment fees and penal charges. Also, delayed EMI payment can lower your credit score. You can opt for ECS to automatically pay the EMIs every month.
- Part pre-pay when you have additional funds
Part pre-payment means clearing a substantial portion of your outstanding engineer’s loan amount. You can opt for part pre-payment facility if you have received a bonus or increment.
This facility can either:
- Lower your EMIs keeping the tenor same.
- Lower the loan tenor keeping the EMIs same.
Bajaj Finserv is a financial institution that provides part pre-payment facility with their Loan for Engineers.
- Foreclose the loan if you have the necessary amount
Foreclosing the loan will help you avoid the interest on the outstanding balance. You will have to pay a charge for this facility.
Make sure to compare the rate of interest and know how to choose the right loan provider before you apply for a professional loan.