What are the Business Loan Options Available for Physicians?

The healthcare industry is one of the largest and fastest growing service sectors in India. Recent predictions estimate a threefold increase of this sector, reaching Rs. 8.6 trillion by 2022.

Such massive growth in the industry is largely thanks to the increasing demand for quality healthcare services and the availability of finances for doctors and physicians. Multiple financial organisations including NBFCs offer loans to promote business growth of the medical care industry.

Financial institutes offer tailor-made loans to help physicians meet varied requirements. An eligible applicant can get avail business loans for physicians to provide the essential funds required to build a stable financial base, organise their business’ working capital, and provide better service to their patients.

NBFCs like Bajaj Finserv offer such Business Loan for Doctors at affordable interest rates, with flexible tenors, and several other features and benefits.

Some of them are:

  • Flexi Loan facility – Flexi Loan facility allows a borrower to take out the exact amount of funds they require from a pre-approved loan limit. They can repay that according to their convenience. It can significantly decrease their EMI burden as the interest is calculated only on the borrowed amount instead of the principal.
  • Quick disbursal – The loan amount is credited to your account within 24 hours after the loan is approved.
  • No collateral needed – In case of a business loan for doctors, you don’t have to pledge any collateral and thus require minimal documentation. The maximum loan amount available for an unsecured business loan for doctors is up to Rs. 30 Lakh. You can use this amount to redecorate your house, upgrade your medical equipment, or meet other necessities.
  • Flexible repayment tenors – The tenor to repay your credit varies from 12-96 months, for your convenience.
  • Pre-approved facilities – For physician business loans, this offer helps to easily avail a loan.

Such features allow a physician to tailor the repayment tenor according to their unique requirements so that they can clear off the debt without straining their personal finances. However, to avail such a credit, one must learn about the eligibility criteria to apply for a physician business loan.

Eligibility for physician business loans

You might ask how to be eligible for a doctor loan. Before applying for a loan, you need to meet certain criteria. These are:

  1. BDS or MDS (Dentists) must have a practice of at least 5 years post qualification to avail an unsecured loan for doctors.
  2. BAMS and BHMS (Ayurvedic and Homoeopathic doctors) should have a minimum experience of 6 years. They must also possess ownership of a house or a clinic to avail such loans.
  3. MBBS (Graduate doctors) should possess at least 2 years of experience post-qualification.
  4. DHMS (Homoeopathic Doctors) need to hold 15 years of minimum experience and also own a clinic or a house.
  5. MD/MS/DM (Super-specialist doctors) need not furnish any minimum experience to be eligible.
  6. Required documents –
  • Medical registration certificate.
  • KYC documents like Aadhaar, Pan Car, Voter Id, Passport, etc.

The interest varies between 14-16%, and there is a processing fee of up to 2% of the total loan amount. These types of credits are usually approved and disbursed within 24 hours thanks to the online application.

Financial criteria for loan approval

You need to meet 2 other important parameters as a part of your loan eligibility. These are – a) credit score and b) debt-to-income ratio.

  1. Credit score – A credit score is a three-digit score that ranges from 300-900. As there is no collateral to pledge in an unsecured loan, a credit score plays an important part to increase your chances of loan approval. To avail physician business loans, your credit score must be 750 or above.
  2. FOIR – FOIR or fixed Obligations to Income Ratio is another parameter checked by financial institutions. Your fixed obligation is your credit bill, monthly expenses, workforce expenditure, etc. The debt-to-income ratio, commonly called FOIR, should be at least 50% or less.

Now, you are aware of the why and how of healthcare finances. With the checklist on how to apply for a loan and the required eligibility for physician business loans, you can apply for your required credit without any hassle to keep your practice going.

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