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Common Terms of Physician Mortgage Loans and its Pros and Cons

The healthcare industry of India is evolving and is expected to reach $ 133.44 billion by 2022. The medical tourism industry has also contributed to the growth of this sector and expects to reach $ 9 billion by 2020. 

Developing medical centers may seem to be mildly challenging, owing to the requirement of substantial funding. To help overcome such challenges, several financial institutions and NBFCs offer healthcare finance in the form of collateral or collateral-free advances. 

Mortgaged loans are secured credits that are availed against property as collateral. Being secured loans, the funds are available against low-interest rates. Physician mortgage loans are secured advances customized for doctors to help them with finances required for their professional purposes. 

Given below are some benefits and disadvantages of the physician mortgage loan. 

Benefits

  • Approvals- These credits easily accessible post verification of the required documents. Some lenders even approve mortgage loans within 24 hours. 
  • Loan amount- Applicants get to enjoy substantial loan amount up to Rs. 2 Crore to cater to all their financial needs. The sanctioned amount will depend on your credit history and financial stability apart from the market value of the property. Paying off your existing dues on time, limiting the usage of credit cards are some ways in which doctors can increase their CIBIL score. 
  • Flexi Loan facility- Such facilities allow the borrower to pay only the interest part throughout the tenor as EMIs. After the tenor ends, you can pay the principal amount in a lump sum to clear off the dues. Also, you can withdraw and pre-pay from a predetermined loan amount as per your convenience. 
  • Balance transfer- You can shift your outstanding physician mortgage loans amount from the existing lender to a new lender offering a lower interest rate. The payable EMIs have two components titled the principal amount and the interest amount. At the initial stages of the tenor, the interest proportion is higher than the principal one. Hence, it is beneficial to transfer your balance at the initial stages to save on the interest amount. While you transfer, do make sure that you understand the fees and charges on your doctor loan offered by the lender. 
  • Convenient application process- Individuals can apply for these advances by filling up an application form online on their official website. After the application gets approved, a representative of your lender will visit you to guide you throughout the process. Also, several lenders offer fast disbursal to help you meet your financial emergencies such as to control your clinics’ inventory, renovate the clinic, etc. 
  • Tenor- Borrowers get to enjoy a prolonged tenor up to 18 years to pay back the borrowed amount. 

Several financial institutions and NBFCs provide such professional loans to physicians as a source of healthcare finance. Bajaj Finserv is one such NBFC that offers Loan for Doctors at an attractive interest rate against minimum documents. They also provide online account access, instant approval, the faster disbursal, and many other lucrative benefits. 

Disadvantages

These physician mortgage loans have minimal disadvantages, as mentioned below: 

  • As the tenor is long, the total cost of your loan will be high even though the interest rates are lower than those of short-term advances. 
  • In case you default on payments, the ownership of your property will be transferred to your lender who can wish to sell off the property to make up for the loss. 

To keep away from these disadvantages, you should avoid some common financial mistakes that doctors make like unnecessary expensive investments, inadequate tax planning, etc. 

Apart from the above, your healthcare finance also provides you with tax benefits and customized insurance schemes. To enjoy the benefits of these advances, you must make your repayments on time and avoid hefty late penalties. 

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