Examples of engineers achieving considerable success are prominently showcased with companies Flipkart, Paytm, Ola, Snapdeal, and others. With a section of engineers as well as individuals from other specific professions aiming towards entrepreneurship, the Government has made it easier for them to thrive with the help of initiatives such as Startup India.
Furthermore, NBFCs and financial firms have also contributed amply to helping engineers start their own companies with the necessary financial backing.
Their customized financial advances for such individuals, like Engineers’ Loans, are specifically targeted towards the self-employed. These advances deliver the necessary funds required by engineers turned entrepreneurs to fulfill all their business needs.
Some of the features of these loans include:
Quickly available
You can avail these unsecured and collateral-free loans within 24 hours. Hence, these are readily available in times of emergency business requirements.
No end-use restrictions
These loans don’t have an end-use limit; a few of the ways an engineering business can use an engineer’s loan include:
- Buying or upgrading the latest equipment
- Purchasing plant & machinery.
- Expanding your business, etc.
Convenient repayment tenors
The repayment tenors of a professional loan range from 12 to 60 months. You have flexibility in choosing the tenor according to your needs.
High financing options and additional benefits
NBFCs provide finance for engineers of up to ₹30 Lakh. They also bring pre-approved offers which make the process of availing financing simplistic and saves you time.
Minimum documents required
Financial institutions require few documents given listed below to sanction an engineer’s loan:
- Engineering degree certificate.
- KYC documents – Aadhaar, PAN, Passport, Driving License, Voter ID, etc.
- Past 3 months Bank account statements.
- Documents to support the proof of business.
Simplistic eligibility criteria
You have to fulfill only the two eligibility criteria to avail these loans:
- Be between the ages of 26 and 65 years.
- Have a business experience of minimum three years.
NBFCs also require engineers to have a CIBIL score of 750 or more to avail a loan. There are numerous ways how you can increase your credit score like availing a credit card, keeping your credit utilization under 50%, paying the total amount due, etc.
Few tips to keep in mind before you apply:
- Use a loan eligibility calculator
An engineer’s loan eligibility calculator tells you the loan amount you are eligible for. Provide your income, outstanding loan EMIs, and credit card debt to check your loan amount.
- Choose the loan tenor wisely
Longer tenors will make your EMIs affordable compared to shorter ones and vice versa. But, longer tenors will also make your total interest high compared to shorter ones and vice versa.
For example, you have to pay total interest of ₹100,401 on a loan of ₹3 Lakh at the term of 5 years at a 12% rate of interest.
On the other hand, you have to pay total interest of ₹ 58,715 for 3 years with the loan amount and rate of interest remaining same.
- Keep your debt-to-income ratio under 50%
Lenders check the Fixed Obligation to Income Ratio (FOIR) or a debt-to-income ratio of customers when they apply. Generally, NBFCs require applicants to have a FOIR of 60% or lower.
To do that, you have to repay your existing loans, pay your credit card bills, and also pay other debts.
- Do not apply for too many loans
Applying for multiple engineers’ loans with lenders will lead to credit inquiries for your CIBIL score. Each inquiry will lower your credit score; hence, several such enquiries cause your CIBIL to go down considerably.
Last but not least, compare the engineer Loan interest rates, charges, and features before you apply.
