Engineer loans are a great finance option for the self-employed engineer. What’s more, there are multiple sources of these professional loan for engineers, including banks and non-banking financial companies (NBFCs) like Bajaj Finserv. Engineers can avail them for various purposes- both professional and personal.
Here are three intelligent uses of an engineer’s loan:
1. Expansion of Your Business
This is one of the most common reasons to avail a professional loan for engineers. Whether your office cubicles are full (requiring you to find a new location), or you need an extra pair of hands, availing an engineer loan can help your engineering firm expand.
If you’re going to get yourself a new space, you need to measure the potential change in revenue that this can cause and factor it into your repayment strategy. That is, you have to be sure that, even with the increased costs, you can repay your loan amount and still make a profit.
2. Build Credit for The Future
If you anticipate requiring a big loan in the future, taking an engineer loan to meet a short-term requirement is a good idea. You can keep doing this to build your credit profile and increase your credit score.
This is quite necessary if neither your business, nor you personally, have a history of credit. Lenders check both your business’s and your own personal credit history before sanctioning any loan.
Additionally, this process of taking engineer loans to meet short term goals can help you create a relationship with a particular lender, that you can approach when you need the big loan as well. However, be careful that you pay all your EMIs on time, and repay the amount within the tenor. Even a single late payment can be disastrous on your credit profile.
3. Purchase/ Upgrade Equipment for Your Business
As an engineering firm your equipment is an important part of your business. Whether you want to purchase new equipment or upgrade existing ones, an engineer loan can help you achieve your goal. From new machinery to IT equipment, you can purchase any product or tool to improve your business services.
Moreover, you also have the choice to take an equipment or machinery loan. Taking it would allow you keep the equipment you buy or upgrade as the collateral for the loan, and if you take it along with the engineer loan, it would add to your loan amount.
Additionally, before you decide to take a loan to purchase equipment, make sure that you actually need the new equipment. The equipment you’re about to purchase with the loan amount shouldn’t be something that would just be ‘nice to have’.
Remember to research the products offered by both banks and NBFCs before you decide to avail one. Study their features and benefits and be sure to check the eligibility criteria and documents required for engineer loans, as well.
For example, Bajaj Finserv’s Engineer Loan is a great option, if you’re planning to take an engineer loan. It offers a line-of-credit facility, allowing you take any amount within the credit limit, as per your requirements. The loan amount offered is Rs. 15 lakh and it can be prepaid anytime within the tenor, at no additional cost.
Moreover, you have the option to pay only the interest on the amount you borrowed as EMI, thereby reducing the engineer loan interest rates drastically. Since it is an unsecured loan, there is no need for collateral or a guarantor and the loan is processed and disbursed in a matter of 72 hours. What’s more is that the entire application process and even payments can be done online!