On an average, physicians earn significantly more than many other professionals even when they are starting their practice. A new MBBS graduate earns approximately Rs 7 Lakh per annum at private hospitals, while the figure is slightly less in government-run or aided institutions. Of course, government service has other perks which make up for the lower pay. Naturally, all financial establishments have no hindrance when they approve a loan for doctors.
Like most recently passed-out professionals, physicians too may have large outstanding ventures and low savings. However, they also have a high income potential. Thus, they are suited perfectly for professional loans such as a physician loan. Such a financial tool also provides a lot of benefits and advantages, although there are a few disadvantages.
Some of the key aspects of a doctor loan are as follows.
Advantages of a loan for physicians
A physician loan has the following extraordinary advantages.
- Various types of loans for personal expenditure
Almost all financial institutions offer a wide variety of loans that are applicable for various purposes. Noted NBFCs like Bajaj Finserv provide a personal loan for physicians of up to Rs. 30 Lakh. Using the money, they can plan a destination wedding, invest in home renovation, and fulfil a lot of other personal desires.
- Professional expenses are covered
Many doctors in India are nowadays setting up their own clinics. However, self-employment is not easy. It takes extensive planning, hiring the right employees and substantial funds. That is where a business loan or a loan against property comes in, as they provide substantial money for the initial stages.
- Makes it possible to fund further education
MBBS graduates look to complete their MD or MS degrees as soon as they can. It leads to better career prospects, and higher salaries. With the rise of modern technology, there are also multiple reasons to consider acquiring a super-specialty degree. A rapid growth in health-consciousness has also led to a significant rise in the patients seeking specialist treatment. In turn, the number of physicians looking to complete their MD and MCh degrees is rising. These qualifications are expensive to complete and a loan can help.
- Debt consolidation
A one-time loan can help consolidate all previous outstanding amounts. It helps make repayments easier as all the previous debts are now rolled into one. It is also a great strategy for self-employed doctors.
- Fund your child’s education
The education costs for children have risen sharply in the last few years. It poses a major challenge for parents, and physicians are no exceptions here. Everyone wants children to study at the greatest universities of the country or the world. The major issue of funds can be addressed by a physician loan. It provides a lot of liquidity and makes future planning easier.
How to best utilise loan for doctors or physicians
Loans for physicians have no serious drawbacks. Doctor loan interest rates are comparatively lower than similar loans for a general individual which makes repayment more convenient. If you maintain a CIBIL score of 750 or above, you are eligible for the best loan terms and benefits. There are many common financial mistakes that doctors make while applying for a loan.
To maintain a healthy CIBIL score, always keep your previous debts in check; avoid applying for multiple loans simultaneously, never over-borrow on your credit cards, and maintain an overall financial discipline. You can also use a physician loan to help clear your previous debts.
Overall, a doctor’s loan is an excellent idea. It has a lot of advantages, is easy to repay, and the sums disbursed are significant. Before you approach a financial institution, be sure to check the doctor loan eligibility criteria for fast approval and disbursal.
It is always better to apply for loans from NBFCs, as most proposals are approved within 24 hours. It is expected that recent changes in repo rates and other RBI regulations will make availing such loans even easier.