As a medical professional, you may have considered opting for a loan to expand your private practice or for a personal purpose. Here’s a simple list of 5 common mistakes doctors should avoid when taking a loan.
As a doctor, you have a very busy life, with both work and personal commitments leaving little to no time for taking efficient care of your finances. However, when it comes to taking a loan, be it for your clinic or practice, for personal reasons, for buying a home or for any other purpose, devoting just a little time to manage your finances can go a long way.
The best part about finance management is that you don’t have to understand every small detail related to it. You can start slow, and accumulate more information as you progress. If you are thinking of taking a loan customised for doctors like yourself, be it a personal loan, a business loan, a home loan, or a loan against property, there are certain guidelines you can follow while applying for a loan for doctors.
General mistakes to avoid when applying for a doctor loan
Don’t go to the wrong lender
It may not be the best idea to take a loan from a financial institution just because it’s the closest to you, or because your other loans have been supplied by it. Complacency in this regard could lead to a cumbersome loan application and approval process. It is advisable to find a lender who has good experience with serving medical professionals, or someone who has customized loans with additional facilities just for your needs.
Don’t choose the wrong financial option
Lenders today offer a wide variety of financing options. Understanding the drawbacks of a particular option is the first step. For example, you may think that using a credit card to buy a new piece of equipment is the right call because it offers instant access to funds. However, the interest rates on credit cards are often too high. It is always better to opt for a term loan (business loan) rather than a credit card, since it offers lower interest rates and a better tenor.
Don’t opt for a generalized loan
Financial institutions recognize the fact that you have a high potential for income. Additionally, they understand that your financial needs are unique, which is why they offer tailor-made loans for you, with function-specific facilities. It is always a good idea to apply for a doctor loan rather than a standard one. A doctor loan usually has a suite of four loans customised for you—a personal loan and a business loan up to Rs.30 lakh, a home loan and a loan against property up to Rs.2 crore.
Don’t ignore the tenor
The tenor, or time over which a loan is repaid, plays an important role in helping you manage your finances and ensure a smooth cash flow. If you want a loan for small or short-term needs, a short tenor works best. If, on the other hand, you are looking for a commercial property to establish your private clinic, a longer tenor of 60 months or more is advisable. If you’re looking for a home loan, an even longer tenor up to 240 months is prudent. Choose your tenor based on your repayment ability and use of the loan amount.
Don’t settle for less
Being a doctor gives you access to exclusive benefits when applying for a loan. You can get approval faster, receive a higher loan amount, and even gain a line of credit for additional expenses, at low rates. Apply for a loan only at financial institutions that offer you such qualification-related benefits.
With easy eligibility, approval within 24 hours, attractive interest rates, and a high loan amount, Doctor Loans by Bajaj Finserv are highly-customized to suit the individual needs of doctors.