As a working professional, you may look towards approaching a lender when you have a sudden need for funds. For most, a personal loan is an obvious choice at this time. However, a self-employed professional, such as a company secretary, can opt for a specially created CS loan or loan for company secretaries.
This is a credit solution under the umbrella of professional loans tailored for certain self-employed members of society, such as doctors, lawyers, chartered accountants and more. By opting for it, you can meet your personal or professional needs with ease.
A CS loan scores higher than a personal loan since it comes with benefits, such as lower processing fees, higher loan amounts, nominal interest rates and various customisations. As a company secretary, you can avail a CS loan at attractive interest rates and access many other benefits to grow your practice. Keep reading to know more.
A Guide to Understanding a CS Loan for a Company Secretary
As a company secretary, you may have different financial requirements at various stages in your career. Your requirements may vary from hiring staff with different specialisations to scaling up operations.
Loans for professional like company secretaries usually offer you up to ₹45 Lakhs, and the interest rates range from 9.99% to 14% p.a., depending on the lender. The maximum repayment tenure can go up to 84 months or more.
Eligibility Criteria for a CS Loan
While the eligibility criteria for a CS loan differs from lender to lender, these are a few of the common criteria set down by lenders:
- You should be an Indian citizen and resident between the ages of 25 and 65
- You should have the right degree or qualifications and run your own practice
- Your annual income should be at least ₹3 Lakhs
- You should have experience of at least 1 year in your field
On meeting these terms, you can qualify for a CS loan. The next step is to understand your loan terms and choose the right deal.
How to Choose Between Fixed and Variable Interest Rates
While opting for a CS loan, you have the option of choosing between a fixed interest rate or a floating interest rate. Both options have their drawbacks and benefits, which you can compare to decide on the right path.
Interest calculators are a good tool to use to supplement your decision. However, here is a breakdown of these two types of rates.
Fixed Interest Rate
Fixed rates are not influenced by changes in the market, and mostly remain unchanged throughout the loan’s tenure. You can easily estimate your EMIs beforehand with fixed interest rates, which makes managing finances and planning repayment much more systematic. Also, there is no risk of unprecedented interest rate rise due to market fluctuations.
However, there are drawbacks associated with this type of interest rate. In most cases, the fixed interest rate can be 1.5% to 2% higher as compared to a floating interest rate. Also, if the base rates fall at some point during the loan tenure, you still have to pay interest at the predetermined rate. This way, you miss out on benefitting from lower rates.
Variable Interest Rate
A variable or floating interest rate means that the interest rate will vary as per market conditions. These are typically cheaper than fixed-rate loans at the onset. However, the rates may increase due to market factors.
To counter this, you can also enjoy lower rates based on the economic climate. The major drawback is the evolving monthly EMI figure. This way, it becomes difficult to plan your finances and savings. However, lenders keep your EMIs the same and vary the tenor to make it easier to repay.
Benefits of Opting for a CS Loan
Here are a few advantages offered by loans for professional company secretaries.
Hassle-free Access to Funds
The process to apply for a CS loan is extremely simple as the loan is customised for you. All you need to do is fill in the online application form, verify your identity with an OTP, and submit the paperwork. Once your application is approved, the loan amount gets credited to your account within a few minutes or 24 hours, depending on the lender.
No Need for Collateral
There is no need to pledge collateral as CS loans are usually unsecured. This allows you easy access to the required funds without having to pledge any assets to the lender.
You can avail pre-approved offers or discounts on processing fees and other charges based on your credit score and relationship with the lender. Pocket-friendly interest rates, quick approvals, zero prepayment fees and other facilities can also be part of such offers.
Other than regular term loans, some lenders offer you flexible loans where the interest is only charged on the amount you have utilised rather than on the sanctioned figure. For example, say you apply for a CS loan of ₹30 Lakhs to renovate your office. However, you only used ₹22 Lakhs. In this case, you only pay interest on 22 Lakhs and not on the entire amount. You can thus pay EMIs accordingly.
As you can see, a CS loan is a great way to inject working capital into your practice or sustain it during lean times. You can use it to enhance your professional skills, train your team, attend conferences, meet with potential clients, pay for overheads, and so much more.
Make sure to conduct due diligence and analyse all the pros and cons before choosing a lender. By selecting a lender who offers digital convenience and transparent terms, you can boost your practice hassle-free!