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Doctor Loan: Financing Solutions for Medical Professionals

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Mar 22, 2024

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Doctor Loan

Personal loans for doctors are now available for amounts up to Rs. 5 crores with a flexible tenure ranging from 12 to 96 months. The interest rate starts at 8% per annum, and the processing fee can be up to 3% of the loan amount. These specialized loans are designed to meet the operational requirements of professional doctors and medical practitioners.

Details of Loan for Doctors

- Loan amount: Rs. 2 Lakhs - Rs. 5 Crores

- Tenure: 1 year - 8 years

- Interest Rate: 8% p.a. - 36% p.a.

- Processing Fee: Up to 3% of the sanctioned loan amount

- Prepayment Charges: 0% - 7%

What is a Doctor's Loan?

A Doctor Loan is a special type of loan specifically tailored for professional doctors who either own a clinic or work in a government/private clinic, hospitals, or as consultants. The purpose of a Doctor Loan is to serve the financial needs of doctors who are looking to expand their scale of operations.

Benefits of Doctor Loan

Here are some key benefits of Doctor Loan:

- Lower interest rates compared to loans offered to other self-employed professionals.

- Fast turnaround time with loan approval within hours.

- No guarantors required.

- Funds can be used for various purposes such as clinic construction, equipment purchase, and renovation.

- Flexible loan tenure ranging from 12 months to 96 months.

- Possibility of part-prepayment.

- Minimal documentation and quick approval based on basic KYC, income proof, and credit score.

- Pre-approved loans are available for doctors from most financial institutions.

Eligibility for a Doctor Loan

To qualify for a Doctor Loan, the following eligibility criteria must be met:

- The applicant must be a Salaried Doctor.

- Should be a Registered Medical Practitioner/Physiotherapist in the age group between 25 to 65 years with a minimum experience of 2 to 5 years, depending on the bank.

- In the case of Partnership firms, at least 50% of the partners should be doctors.

- In the case of a Company, at least 50% of the shares should be owned by doctors.

- Hospitals run by Trusts/Companies/Institutions are also eligible for the loan.

- Professionals managing Medical Diagnostic Centres and Testing Labs are eligible.

- For loan amounts up to 10 Lakhs, close relatives (spouse, mother, son, or daughter) with regular income can be co-applicants, even if they are not doctors. However, the maximum number of co-applicants should not exceed two.

- Applicants should have an IMA (Indian Medical Association) membership number or any registration allowed by the Indian Government.

- The business should have been profitable for at least two years.

- Minimum annual income of 1 Lakh as per ITR (Income Tax Return).

- The applicant's Credit Score should be above 700.

Documents Required for Doctor Loan

The following documents are required to apply for a Doctor Loan:

- KYC documents of authorized signatories, such as Aadhar Card, Voter ID, Passport, and Driving License.

- Medical registration certificate.

- Education qualification certificates.

- Income documents, such as ITR for the last 2 years, salary slips (if salaried).

- Bank account statements of the last 3 months (if salaried) or current account statements (if self-employed).

- Permanent address proof.

- Property ownership proof (office or residence).

- PAN Card.

Degrees Required to Apply for Doctor Loan

Here are some of the degrees that are required to apply for a Doctor Loan:

- MD/DM/MS for Super Specialist Doctors.

- MBBS for Graduate Doctors.

- BDS/MDS for Dentists.

- BHMS/BAMS for Ayurvedic and Homeopathic Doctors.

- DHMS for Homeopathic Doctors.

Types of Entities Eligible for Doctor Loan

Several categories of doctors can avail of loans from banks or other financial institutions:

- Salaried doctors: Medical practitioners with a regular source of income and at least 5 years of experience in the field.

- Self-employed doctors: Doctors operating as proprietors in a proprietorship firm, as a partner in a partnership firm or LLP, and as Directors in Private Limited Companies.

- Loans for hospitals and nursing homes: Loans are provided for setting up new clinics/hospitals/nursing homes or for the renovation/repair of existing premises.

- Loans for diagnostic centers: Loans are given to doctors who wish to set up diagnostic centers and pathological laboratories.

- Loans for specialized clinics: These loans are taken by doctors to set up specialized clinics like Dermatology clinics, Dental clinics, and Ophthalmic Centres.

Purpose of Doctor Loan

Doctor Loan can be utilized for the following purposes:

- Dentists can use the loan for the purchase of dental implants.

- Orthopedists can utilize the loan for various replacements/implants for shoulders, knees, hips, spines, etc.

- The loan can also be used for the purchase of medical equipment.

- For setting up a clinic, nursing home, hospital, veterinary hospital, pathology labs, and drug store.

- For the purchase of ready-built premises for hospitals/clinics or the construction of clinics/hospitals on self-owned sites or land.

- If the loan is for the purchase of land and construction, the value of the land should not exceed 50% of the project cost.

- In case of the purchase of ready-built buildings, the age of the building should not exceed 30 years. The residual life of the building should be at least 5 years longer than the repayment period.

- For the purchase of computers, vehicles, ambulances, furniture & fixtures, etc.

- For the expansion/renovation/modernization of existing premises.

- For incorporating state-of-the-art technology into the existing establishment.

Secured Doctor Loans

Secured loans for doctors are mortgage loans that can be availed of by both salaried and self-employed doctors against the mortgage of residential or commercial property. Banks and other financial institutions offer these loans to doctors for setting up clinics, nursing homes, or buying medical equipment. Equipment loans are available as secured loans, which are secured against the equipment purchased.

Some of the equipment that can be purchased with Doctor Loan are:

- Sonography Machines

- CT Scanners

- MRI Machines

- X-Ray Machines

How to apply for a Doctor Loan?

You can apply for a personal loan for doctors through MyMoneyMantra.

- Access our website and select "Personal Loan" under the Loans tab.

- Log in by providing the required details.

- Verify the OTP.

- Enter your employment and income details.

- Enter your date of birth, PAN card number, and complete address.

- Click on Submit and View Offers.

- Select the desired option and click on Econnect.

- Our team will contact you to extend your application.

Things to Consider While Applying for a Doctor Loan

Here are some important factors to consider when applying for a Doctor Loan:

- Check credit score: It is crucial to check your credit score before applying for a loan. A low credit score can result in your loan application being rejected. To qualify for the loan, a credit score above 700 is usually required. Check your score and rectify any discrepancies to maintain a high score.

- Do market research: Research different loan providers in the market to find the best rates and features. This will enable you to secure the best deal for your loan.

- Avoid multiple applications: Applying for multiple loans with different banks simultaneously can reduce your chances of being approved. Each inquiry made at a bank will be listed on your credit report and can lower your credit score. Instead, conduct market research, maintain a good credit score, and prepare all necessary documents before applying for a loan to minimize the turnaround time.

- Business existence: A minimum of 2 years of experience in the field, with a profitable existence, is usually required to qualify for the loan. If your business is relatively new and hasn't yet broken even, the chances of loan approval are slim.

- Maintain proper accounts: If you run a business, maintaining proper accounts and financial information is crucial. Your financial statements, such as the balance sheet and profit and loss accounts, are used to assess your repayment capacity.