All about Doctor Loan in India

Guest Post by Ashish Gupta

Overview:

Healthcare in India has a huge potential for Doctors to establish their own practice. The lop-sided demand for medical professionals allows ample scope for gainful earning opportunities as a medical practitioner. However, the launch of practice is a challenging task due to finance for setting up a clinic. Doctor Loan is just the sort of credit facility designed by Financial Institutions aimed at medical professionals exclusively to meet their varied needs in starting or running the clinic. It is like any other business loan offered by traditional banks as well as NBFC and new-age Fintech firms who have made a foray into this segment with innovative products catering to the specific requirements of Doctors.

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Purposes of Doctor Loan:

A Doctor Loan is a specific business loan to be availed of for a plethora of needs depending on the area of specialization for a customized range of activities. Some of the common reasons to avail of Doctor Loan are:

Purchase of Premises: A major component of medical practice is a suitable premise, both new and existing, needing huge financial resources.
Recruitment of skilled staff: Being a specialized profession, a doctor needs to hire skilled personnel for the set up to administer services smoothly. Suitable personnel aresupport staff, technicians, junior and senior doctors.
Meeting Working Capital Needs: A clinic like any other Business Enterprise needs adequate Working Capital for day to day smooth functioning by maintaining cash flow balance, which can be eminently managed by a Doctor Loan like Line of Credit facility with the lender.
Procuring Equipment: A clinic or a hospital needs equipment and technological upgrades from time to time as a basic requirement specific to the specialty. A Doctor Loan is customized for individual needs depending on its operations.
Marketing: Funds for marketing is an intrinsic component of budget for the clinic. An aggressive marketing blitz using all the means of social media, press, visual media and banners, hoarding etc are tools for establishing a brand identity to ensure customer interest.

Benefits of Doctor Loan:

While availing of a Doctor Loan it is imperative to weigh the pros and cons. Some of the redeeming features of a Doctor Loan are:

Hassle free application process
Customized loan products.
Competitive rates of interest.
Generous eligibility norms.
Simplified documentation.
Swift processing of loan.
No hidden terms, conditions, or cost.

Eligibility norms for Doctor Loan:

In spite of variations from lender to lender, the eligibility norms for Doctor Loan can be standardized into the following across a majority of them. Doctor Loan is inbuilt facility in few healthcare companies, It is worthwhile for a doctor to access the digital interface of a prospective lender and check for the eligibility criterion as well as the amount suiting the needs of the clinic. The primary eligibility criterion are enumerated below:

An Indian citizen minimum 25 years in age.
Individuals, Partnership, Trust, Society, Private / Public Company.
Suitable Professional Qualification and additionally, post qualification experience described as under:
Medical Graduate:
Degree: MBBS
Post Qualification Experience: Minimum 5 years
Postgraduate and Super Specialists:
Degree: MD, MS, DM and MCH
Post Qualification Experience: Not Required
Dentist:
Degree: BDS or MDS
Post Qualification Experience: Minimum 5 years
Homoeopathy Doctors:
Degree: BHMS or DHMS
Post Qualification Experience: Minimum 6 years and 15 years respectively alongwith house or clinic ownership.
Ayurveda Doctors:
Degree: BAMS
Post Qualification Experience: Minimum 6 years alongwith house or clinic ownership.
Registration with the appropriate regulatory authority for medical practice in India, which is the MCI or the IMA for medical graduates.
The minimum stipulated annual income considered for Doctor Loan is Rs.1L. However, check with individual lenders for higher criterion if any.
The minimum operational life of the clinic is 2 years for most but can be as low as 6 months with some lenders.

Documents required for Doctor Loan:

Conventional lenders like banks normally have elaborate documentation norms while NBFC and Fintech companies are more liberal seeking sparse documents. Accordingly, a set as under is indicative of the necessary documents.

Documents aimed to satisfy KYC norms inclusive of Identity, residence proof and AadhaarCard.
Proof of registration certificate with the appropriate regulatory authority like MCI / IMA etc based on qualification.
Bank account statements of the previous 6 months.
Audited Financial Statements including ITR and proof of computation of tax of the previous 2 years.
Details of other loans, if any.
Any other specific document sought by the lender depending on the category of the applicant.

Application Process for Doctor Loan:

The application process is digital and simple for most of the lenders. While for conventional lenders like banks, it is tantamount to expression of interest needing completion of formalities in Brick and Mortar outlet, in the case of Fintech the entire process is online, making it convenient for the applicant. The process may be accomplished in a few simple steps.

Complete the filling up of the application form online with requisite inputs sought mandatorily.
Upload digital copies of requisite documents.
The loan application is evaluated and submitted documents vetted by the lender.
On intimation of approval and acceptance, the loan amount is disbursed to the credit of bank account.

Applicable Fees and Charges for Doctor Loan:

It is important to assess the cost of fund sought from the lender through a check of the applicable rates charged and the conditions. Some points to note for a favorable cost regime are:

Higher the amount of loan, lower the rate of interest.
Longer tenor attracts lower rate of interest.
Low CIBIL rank increases the imposed rate of interest.
Good Balance Sheet margins are viewed positively.
Long running clinics draw favorable rates.

Considering the above, the following applicable indicative fees and charges have been tabulated for a check at a glance:

Doctor Loan applicable Fees, Charges and Other Features
Rate of Interest	Ranging from 1% to 2% per month
Processing Fee	1% to 2% of the loan amount upfront on disbursal
Foreclosure Charges	Nil
Loan Tenor	Maximum up to 3 years
Amount of loan	From Rs.50L to Rs.1C free of any collateral
Type of Loan	Term Loan or Line of Credit (Overdraft)
Repayment Terms	Generally EMI. or fortnightly at some lenders

Bottom Line:

In the light of ample scope to medical practitioners in India, Doctor Loan offers a means to expand in the business of healthcare. Constant upgrades and introduction of emerging technical aids is key to provision of best facilities. Doctor Loan often disbursed in maximum 72 hours has come as a boon to aspiring doctors in India.