Targeted to meet the unique requirements of engineers, an engineer loan offers instant liquidity. Offered to both salaried and self-employed engineers, this loan can be utilised to meet both personal and professional needs. If you are a planning to avail this professional loan, here are some important things for you to know:
Engineer loan has different variants
This loan has different variants catering to needs of salaried and self-employed engineers. For instance, Bajaj Finserv offers engineer loans in two variants:
- Personal Loan for Engineers
- Business Loan for Engineers
While the Personal Loan for Engineers is targeted for salaried individuals, the Business Loan for Engineers is for those running their own engineering venture.
An engineer loan is a collateral-free loan. It means you don’t need to pledge any asset you own as security with your lender. While this gives a sense of relief, it’s essential to note that being a collateral-free loan the interest rate is on the higher side compared to secured loans.
This is because lenders, while offering collateral-free loans, are taking more risk on a borrower as in the event of default, there is nothing on which the lender can fall back on.
Minimal documentation and quick disbursal
Minimal documentation is required to avail an engineer loan. Most lenders ask for common documents such as:
- KYC documents
- Bank statement
- Salary slips
- Passport-size photographs
For self-employed engineers, lenders might also ask for proof of business vintage. Once all the papers are in place, the documents will be picked up from your home, processed, and the loan amount will be disbursed within 24 hours.
Flexi Loan facility
Modern engineer loans such as the one offered by the top NBFCs is equipped with a Flexi Loan facility. It allows you to withdraw funds as per your needs from the approved limit without having to make multiple applications. Also, interest is charged only on the amount borrowed and not the entire limit.
This lowers EMIs, resulting in better management of finances and gives you the financial muscle to tackle unexpected need for funds.
Importance of credit score
Credit score is a three-digit score that lenders use to gauge a borrower’s creditworthiness. Borrowers with a high score, above 750, are considered safe bets with fewer chances of default. On the other hand, a low score can derail the borrowing exercise or make the loan an expensive proposition. Therefore, it’s important to have a healthy credit score to win the confidence of lenders.
Credit score depends on your financial habits. By paying outstanding dues on time and keeping your credit utilisation ratio low, you can build a healthy score that improves chances of availing an engineer loan at a competitive interest rate.
Also, keep other essential documents such as bank statement, copy of IT returns, etc., with you. Some lenders may ask for these documents. Before signing on the dotted lines, do read the fine print to know the various charges associated with the loan and avoid heartburn later. Comparing offerings from different lenders would help you make an informed choice.
Once you check all the important factors which are above stated, from documents to credit score. You can easily apply for engineer loan by visiting the lender’s website and can easily meet your requirements whether it is for personal or for business.