• 9863020202    
  • contact@financeseva.in

All about Personal Loan vs Professional Loans

  • 09-Apr-2022
All about Personal Loan vs Professional Loans

What is a personal loan?                                      

A personal loan is a loan that a borrower uses for several purposes. It does not require any security or collateral as it is an unsecured loan. It is offered by many lenders, financial bodies, or NBFCs. Personal loans can be used for emergency medical treatment, marriage, higher education, purchase of gadgets, travel, home renovation, etc. 

Features and benefits of a personal loan 

Flexible tenure  It has a flexible repayment option that ranges up to 60 months. 
Minimal documentation Prior, a personal loan requires a lot of paperwork which is quite stressful, to make the process easy is the best way to handle and save time. 
High loan amount  The borrower can get loan amounts up to Rs. 25 lakhs, depending on many factors like age, work experience, repayment history, etc. 
Collateral free loan It is an unsecured loan where the borrower does not require to pledge any security or collateral for acquiring a personal loan. 
Speedy approval Once the loan is approved, the amount will be disbursed to your respective account within 2 to 3 days. 
Multi-purpose Personal loans can be used for several purposes like marriage, travel, renovation, education, etc. 

Eligibility criteria for a personal loan 

The eligibility of a personal loan depends on many factors like the age of the borrower, repayment history, work experience, etc. 

 Self-employed individuals Salaried individuals 

Age criteria: 

Minimum – 21 years 

Maximum – 68 years 

Age criteria: 

Minimum – 20 years 

Maximum – 60 years 

The Credit score must be 750 or above The Credit score must be 750 or above 
Nationality should be Resident of India Nationality should be Resident of India 
The continuation of a business should be a minimum of 2 to 5 years. The minimum salary should be Rs. 25,000 
Also read: - Multi-Purpose Personal Loan for Business Owners

What is a professional loan? 

A professional loan is an unsecured loan that is provided to professionals such as doctors, lawyers, CS, Chartered Accountants, architects, engineers, etc., who are going to start their own organization or expand an existing one. There are many banks or financial institutions in India that provide professional loans to customers to meet their specific requirements. 

Features and benefits of a professional loan 

High loan amount  An applicant can get a loan amount up to Rs. 50 lakhs, depending on their profile. 
Repayment tenure  Professional loans have a flexible repayment tenure that ranges up to 60 months. 
Easily accessible Several banks provide professional loans to applicants, and the process of loans is easy and hassle-free. 
Online process The whole process of the loan is online, the applicant has to fill in the form and attach all the required documents. 
No collateral required The borrower doesn’t need to pledge for the security or collateral as it is an unsecured loan. 

Eligibility criteria for a professional loan 

The eligibility criteria for a professional loan depend on various factors such as the age of the borrower, repayment capacity, business turnover, creditworthiness, etc. 

  • The minimum age of the borrower should be 25 and the maximum age is 65 years of age.
  • The business must be in profit-making for the previous 2 years.
  • Eligible professionals such as Chartered Accountants, doctors, architects, lawyers, etc., can apply for professional loans.
  • Nationality must be the resident of India.
  • ITR must be filed for at least 1 year.
  • The borrower can get loan amounts up to Rs. 50 lakhs.
  • The minimum income should be Rs. 1 lakh.

Also read: - Professional loans for Doctors, CA, Architects

Compare the Interest rate of personal loans and professional loans 

Bank name  Personal loan Professional loan 
Kotak Mahindra Bank 10.25% 11% 
ICICI Bank Ltd 10.75% 10.25% 
Aditya Birla Housing Finance Ltd. 14.50% 12% 
Axis Bank Ltd. 10.50% 10.50% 
Standard Chartered Bank 12.00% 14% 
HDFC Bank Ltd. 10.50% 10.50% 
IDFC First Bank 10.50% 10.50% 
Yes Bank Ltd. 10.50% 11% 
Tata Capital Financial Services Limited 12.00% 10.99% 
Hero FinCorp Limited 20.00% 11% 
Fullerton India Private Limited 12.50% 11.99% 
Bajaj Finance Limited 13% 13% 

Conclusion: - As you can see, a personal loan and a professional loan differ from each other. The individual can select the type of loan on the basis of their eligibility and requirements. Before applying for the loan, make sure that you match the eligibility and evaluate the EMI to know the loan amount that will be taken. 

Therefore, knowing the facts about financeseva allow you to choose and compare the best deals.   

How Would You Rate This Article ?