If you’re a doctor or a dentist with plans to finally put up or expand your private practice, upgrade your clinic’s medical equipment, or maybe put a downpayment on that piece of property you’ve been eyeing for months, then you might want to look into a customized financial product for you: Doctor’s Loan.
You might be asking yourself: “How does this compare to other loans that financial institutions offer? And how can I apply for this?”
If that’s the case, let us tell you everything you need to know about personal loan products for doctors in the Philippines, then, later on, we’ll even provide a few helpful tips on how to get better chances of approval should you apply for one.
What is a Doctor’s Loan?
Also known as a physician’s loan, it is a tailor-made financial product that addresses the specific needs of medical professionals in their practice or their personal lives—without the hassle of requirements needed for regular loans.
For some hospitals accredited by financial institutions, doctors only need to fill out an application form from the HR/Admin and they’ll be the ones to process the doctor’s loan application.
Doctors who practice medicine, regardless of specialization, dentists, and veterinarians are allowed to apply for this loan.
What are the documents required for a physician’s loan?
If you’re a doctor in your private practice, these are the usual requirements needed to be qualified for a loan. However, please take note of all the exact requirements from the loan provider you’ve chosen.
- Updated PRC ID
- Latest bank statements of the past 3 months
- One government-issued ID
- Business and DTI permits for clinic owners
- Latest and original utility bill (electric or water)
When should you get a doctor’s loan?
If you’re a doctor with a good credit standing and is already a resident at an accredited hospital, you’re probably good enough to qualify for a doctor’s loan, but that doesn’t assure approval.
Loan providers still need to perform due diligence to determine whether you’re credit-worthy or not. Want to improve your credit-worthiness? Here are five tips you can follow before you apply for a doctor’s loan.
5 tips to better your chances on getting your doctor’s loan approved
Tip No. 1: Tenureship
According to Dr. James Dahle, MD, FACEP, an emergency physician and founder of WhiteCoatInvestor.com, financial and investing resource for physicians, being a resident in the same hospital for at least a year could give you a good chance at having your loan approved. If your tenure is longer than that, the better your chances get.
Tip No. 2: Get a copy of your credit report
Did you know that certain institutions have a record of your credit history (loans availed, credit cards applied for, payment history)? And these institutions work with loan providers to help them gauge your credit-worthiness.
So before you apply for a doctor’s loan, it’s a good idea to get a copy of your credit report to see if your information and credit history is correct and updated.
You can get a copy of your credit report from the Credit Information Corporation (CIC), a government-owned company that issues credit reports to walk-in clients. You can find more about their service here.
Tip No. 3: Compare lenders to get the doctor’s loan with the best rate and terms
Loan providers like banks and lending firms have different requirements and ways to measure if an applicant is credit-worthy or not. So try to compare their requirements to your current standing and see if you exceed their minimum requirements. That way, you’re putting yourself in a better position vs. someone who just barely meets them.
eCompareMo lets you can compare, select, and apply for multiple loan providers all in one place. No need to make multiple visits and take numerous calls just to ask for information about their doctor’s loan.
Tip No. 4: Be aware of your debt-income ratio
Your debt-income ratio is an indicator of how much your gross income is being allocated to pay for debts.
For example: If much of your income is being spent on monthly repayments of personal and auto loans plus credit card obligations, you may be considered a risk. Financial institutions want to make sure you have enough income to afford to repay their loan to you.
The result of your debt-income ratio will be a good indicator of your chance to be approved for a loan.
To compute your debt-to-income ratio, you need to add up all your monthly debt payments then divide them by your gross monthly income.
In general, you want to keep your debt-income ratio below 40%.
Tip No. 5: Finish paying existing debts before applying for a new one
Clearing yourself off of debts with regular, on-time payments will greatly increase your chance to be approved. This shows loan providers that you can pay and keep an outstanding debt record, which means you are responsible for handling your money.
However, don’t be too concerned if you have revolving or recurring debt payments like credit card dues. If you’re paying them off in full and within due date, you’re building a good credit history that loan providers can use to determine your credit-worthiness.
If you have any outstanding debts that are past due, focus on paying them off first, as these do not look good on your credit report investigation.
There will come a point that applying for a loan might be the most reasonable choice for you. Keep these five tips close to your heart to improve your chances of loan approval.
Whether you’re applying for a doctor’s loan or other loans, it’s important to always maintain good financial standing. This is the most important factor in getting your loan approved.
If your credit is not up to par, you need to start working on repairing your credit as soon as possible. A less-than-brilliant credit isn’t the end of the world for you. Get your finances back in good shape so you can be approved for that next loan.