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Doctor's Loan - Things To Know And Top Reasons Why You Might Get Rejected

Doctor's Loan

India is one of the top healthcare destinations in the world, and according to the IBEF, the Indian healthcare market is set to hit the INR 372 billion mark in 2022. The availability of well-trained medical professionals and access to quality healthcare are the things that make India an attractive healthcare destination. The demand for healthcare is set to rise even more in the coming years. Increasing income levels, an ageing population, and rising prevalence of lifestyle diseases are some of the factors that contribute to the growing demand for healthcare services in the country, especially in tier 2 and tier 3 cities.  

What Does it Mean for Doctors?

The above data and information basically drive home a simple point- the demand for healthcare establishments like clinics, hospitals, and diagnostic centres is set to grow, considering the scope of penetration for healthcare services. If you are a medical professional, you too can do your bit towards the expansion of healthcare facilities in the country. For instance, you can set up a clinic or hospital to cater to the needs of the population, or expand your existing facility.

And this is where a doctor’s loan can come to your aid.

What is a Doctor’s Loan?

A doctor or physician loan is a financing option available to medical professionals, if they wish to set up a clinic or hospital, purchase medical equipment, expand existing clinics, or need working capital for everyday operations. Whether you’re a salaried doctor or a self-employed professional, you can avail a loan for doctors to set up or upgrade a clinic, or buy medical equipment or lab research supplies. These are unsecured and collateral-free loans that come with a set of eligibility criteria, just like a personal or business loan.

Non-fulfillment of the eligibility criteria and incomplete documentation can cause your loan application to get rejected. So, before you dive into the probable reasons for rejection, first understand the basic eligibility criteria and documentation requirements.

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Doctor Loan Eligibility Criteria

  • You should be either salaried or have your own private practice or consultancy.
  • You should be a post graduate with a satisfactory credit score and good financial history. However, your specialization and qualification might influence your eligibility criteria.
  • You should have a minimum experience of 3 years.

Documentation Required for Availing of a Doctor Loan

The following are the documents required to apply for a doctor’s loan:

  • Self-attested KYC documents
  • MCI registration certificate: Latest ITR
  • Past 12 months’ bank statement

However, even after fulfilling all the eligibility criteria, your loan application might get rejected at times.

Factors that can Cause your Physician Loan Application to Get Rejected

Unsatisfactory credit score – The credit score is a measure of the credit-worthiness of a customer. It is measured on a scale of 300-850. Your credit score is an indication of your repayment capacity. A good score makes the lender confident about your capability as a borrower.

Discrepancy in application – Sometimes, the lack of adequate information or an incomplete application form may lead to the rejection of your loan application.

Debt-to-income ratio – This ratio essentially indicates the percentage of a person’s gross monthly income that goes towards repayment of loans. A high debt-to-income ratio indicates that you have multiple loans active at the moment, which can raise doubts in the mind of the lender regarding your repayment capacity. The lower your debt-to-income ratio, the better will be your eligibility for the loan. So, it is a good idea to pay off some outstanding debts before taking on a new loan.

Multiple loan rejections – Loan rejections in the past can hurt your credit history and therefore decrease your chances of getting a new loan. If you have been rejected for a loan once, allow some time to pass before you re-apply. Take some time to build your credit score as well. Pay off all bills on time and clear any outstanding debts before you apply.

Conclusion

If your application for a doctor’s loan gets rejected, try and understand why it happened. Ask your lender questions to clear your doubts. Go through the eligibility criteria and assess your own profile thoroughly before you apply in the first place. Get all the necessary documents ready as well. Being prepared will not just make your application strong, but will also help you to negotiate with the lender and get the best deal possible.


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Did You Know

Disbursement

The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.

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