Minimum Credit Score Required for CA Loan Approval

Chartered accountants have the unique opportunity to open their firms within their specific line of business after working for a few years in the industry. CA firms are among the top goals of every CA aspirant. However, setting up a business requires considerable capital investments. Loan for chartered accountants can assist you to arrange the necessary financial backing to initiate your own business.

However, your credit score, among other things, plays an important role in determining whether you qualify for such a professional loan.

Minimum credit rating requirements to avail loans for chartered accountant

CIBIL, the leading credit bureau in India, calculates every member’s creditworthiness by taking into account factors such as repayment history, credit utilisation and more. Based on your history, CIBIL grades you through its 900-point system. To avail any loan in India, you must maintain a credit score of at least 750.

It is extremely difficult to find a loan for chartered accountants with lower CIBIL ratings. However, you can apply for such a loan with a co-applicant who enjoys better scores and qualifies for the credit. In such a case, any defaults or late repayments of the loan can hamper the CIBIL score of the co-applicant as well.

Alternatively, you can try to improve your credit ratings before loan application. Doing so is simple if you have outstanding debts or use a credit card. Pay your loan EMIs on time. Card users can pay their bill on time and in full within the due date. Reducing the credit utilisation ratio on your card can also aid in boosting your CIBIL score.

In a few cases, errors on your CIBIL report can lead to inaccurate and often negative ratings. If you have such issues, make sure to report the same to CIBIL so that it can be rectified at the earliest.

With higher credit ratings, you can avail CA loans with the most competitive CA loan interest rates. Keep an eye on it and always try to improve it to minimise the risk of loan rejections.

Other criteria for chartered accountant loan eligibility
While the credit rating is one important factor that determines eligibility for the loan, other aspects also play a role in this determination.
Age- You can only avail such a loan if you meet the age requirements set by the lender. Generally, those aged between 25 and 65 years can opt for these loans.

Income- Your monthly income determines whether you can repay the loan within the tenor. Applicants with lower monthly earnings will not be approved with chartered accountant loans which have the best terms and benefits.

Additionally, you must ensure to keep your debt to income ratio under check. At no point should your debts surpass 50% of your total monthly income. Increased liabilities can prevent lenders from sanctioning loans to you.

Depending on the financing company you choose, you may need to meet additional criteria to avail loans for chartered accountants. If you fail to qualify for an unsecured loan, you can even opt for a secured loan instead. Since you need to pledge an asset to avail such a loan, eligibility factors are generally more relaxed.

Seek the help of chartered accountant loans to start your firm or grow your existing business. These credit options can provide an edge to you and help your company outshine the competition. Follow the step by step guide to start a new CA firm and succeed easily.