Your credit score plays a crucial role in the ease and cost with which you can access credit. Whether it is a loan of medical equipment, a accountant loan or any other professional loan, a majority of lenders verify this 3-digit score.
Your credit score determines your creditworthiness and gives lenders an idea of the risk you pose as a borrower. A high credit rating makes you a low-risk borrower, meaning someone less likely to default.
So, lenders offer you higher loan amount at affordable cost. This is particularly relevant for a medical equipment loan, which usually involves a substantial loan amount. So, read on to learn how a high credit score of 750 and above helps you qualify for the loan easily.
Get fast approval on your medical equipment loan application
Whether you have been practicing independently for a long time or have just established your clinic, you know that the right medical equipment is essential to providing good healthcare services.
While India manufactures many devices at economical prices, expensive equipment such as ventilators and stents are imported. This drives up their price and can add to your financial burden.
Purchasing all the necessary instruments, whether dental chairs, 3D mammography machines or Doppler ultrasound equipment, can be a significant expense. This is where you can rely on a medical equipment loan to buy all the necessary instruments.
This loan is secured by the devices you purchase, and you can leverage a good credit rating to get your loan application approved quickly.
A good score assures your lender, whether it’s a bank or an NBFC, that you not only have experience with credit, but have also repaid it responsibly in the pass. With an excellent credit score, you can not only increase your chances of approval, but also access credit faster.
Other benefits of a good credit score
Besides speeding up the process of getting the funds you need to your bank account, here are the other benefits you get with a high score.
Get more funding
With the rising cost of medical equipment, securing sufficient financing to lease or purchase equipment is essential. After all, the latest technology can help you better meet the needs of your patients, whether you use it to investigate problems, treat patients, monitor vital signs, and more.
To get sufficient funds for advanced medical equipment, make sure your credit score is high. While lenders offer up to ₹10 crore via a medical equipment loan, getting a sufficient sum pretty much meets all of their eligibility criteria.
While some of this has to do with your work experience, education, and finances, a lot of it depends on your credit score. A high score allows you to get a higher loan amount so you can rely on the best equipment to treat your patients.
Get the freedom to structure repayment your way
Usually, you get a repayment window of 3 months to 84 months when you take out a medical loan to purchase equipment. With a good credit score, you can choose a longer term to repay your loan of medical equipment. This makes it easier for you because your NDEs are spread over time.
However, lenders are reluctant to offer longer terms to unreliable borrowers. Thus, a good credit rating helps you to improve your creditworthiness and to have the freedom to choose the mandate according to your finances.
Enjoy a higher LTV ratio
The loan-to-value ratio is the maximum amount of financing you can obtain relative to the total cost of the equipment you plan to purchase.
For example, suppose the total cost of the medical devices you need is ₹1 Crore. However, due to a low credit score, you can get an LTV of 70%, which amounts to ₹70 Lakhs. This means that you will have to finance the remaining cost of ₹30 Lakhs yourself.
A high credit score helps you achieve a higher LTV ratio, as lenders typically offer up to 90% of the cost of equipment as a loan. To get the maximum funding, maintain your score, in addition to meeting the other eligibility parameters.
Benefit from affordable interest rates
Lenders charge high-risk borrowers a higher interest rate to cover their risk. With an excellent credit score, you can not only get financing offers from a range of lenders, but also get the most nominal interest rate.
Since a high score shows financial diligence, low past credit use, and little or no debt, lenders are more likely to offer you a competitive medical equipment loan interest rate. Such a score also helps you negotiate a better rate if you have multiple offers.
Finally, an affordable rate helps you repay stress-free as it has a direct impact on your EMIs and total interest payable.
Tips to improve your credit score
With persistence and discipline, you can improve your credit score to get a medical equipment loan from any bank or NBFC. Here are some tips that can help you improve your score.
- Pay off all your credit debts on time, whether it’s credit card bills, loan EMIs or more
- Periodically monitor your credit report and correct any errors that may lower your score
- Consolidate existing debts and pay them off to get a higher loan amount and increase your score
- Reduce your credit dependency and control your credit usage by keeping it at 30% of your total credit limit to boost your score
- Diversify your credit profile by taking a combination of secured and unsecured loans
- Do not apply for too much credit at the same time from different financial institutions
With these tips, you can boost your credit score and get a medical equipment loan on favorable terms. With affordable financing, you can invest in new devices and upgrade to the latest technology hassle-free!
This post was last modified on June 29, 2023 7:08 PM