Business Loans and Home Loans for Medical Professionals: What You Need to Know

business loans and home loans for medical professionals

Did you know that medical professionals in Australia are entitled to special perks with business and home loan opportunities? From low deposits to more favourable interest rates, there are a number of advantages offered to qualifying medical professionals.

In this article, we will take a look at which professions are eligible for these business and home loan opportunities. We will also take a look at what benefits you will receive when applying for a loan.

Who is eligible?

Medical professionals registered with the Australian Health Practitioner Regulation Agency (AHPRA) or have a medical provider number are eligible for special rates, discounts, and low deposits on loans.

The following professions are considered eligible:

  • Surgeons
  • Doctors
  • Dentists
  • General Practitioners
  • Psychiatrists
  • Specialists

Some fields receive a reduced benefit compared to the above, for example:

  • Pharmacists
  • Chiropractors
  • Vets
  • Physiotherapists

Business Loans for Medical Professionals

Whether you need a business loan to fund a clinic or purchasing medical equipment, there are a number of ways to secure these loans with more favourable rates and easier access to credit.

What can be funded with a business loan?

There are a number of reasons you can get a business loan for your medical practice. Here are some of the ways that you can apply for your business loan

Funding for GP clinics

You can get a medical loan to handle the funding for office space for your GP clinic along with the furniture, medical equipment, and other infrastructure fir outs.

Medical equipment

Whether you need to upgrade or purchase new medical equipment, a business loan will be able to cover the costs in varying forms of credit.

Business car finance for doctors

You can also purchase a vehicle within your business for a secured car loan rate.

Line of credits

You can also establish a line of credit for your practice to assist with cashflow, payroll, interim cash funding and more.

Fit outs for clinics

Do you want to have a modern cutting-edge clinic with all the bells and whistles? You can easily apply for a loan with Borg Financial to get your fit out ready!

Business takeovers or existing business purchase

You can also take advantage of business loans to purchase or take over an existing medical practice.

Hospital Equipment

Whether it is a chattel mortgage or lease we can easily look to fund hospital equipment.

Commercial Purchase on leasing documents

Certain Commercial or business loans allow you to fund the loan with solely the lease if it is for investment purposes.

Benefits of loans for medical professionals

Many banks and financial institutions are more than happy to offer credit and loans to medical professionals. That’s because loans for doctors and similar professions tend to be of a lower banking risk category. Considering the amount of study, commitment and dedication doctors have to their field of expertise, a bank considers their employment essential and unlikely to change industries. Here’s a look at some of the specific benefits you can expect when taking out a business or doctor home loan:

1). Easier access to credit

Medical professionals tend to have easier access to credit. Unlike a typical home loan, a line of credit is available on an “as needed” basis. That means that you may not require security aside from being a registered practitioner, securing their line of credit to a business or company. A line of credit allows for excellent flexibility and fast access to funds. As a result, many of these loans operate similarly to a giant credit card.

2). Cash out policy is easier

If you are looking to secure a loan to your unencumbered property or asset, then you are more likely to get access to those funds without all the yellow tape restrictions. The bank is likely to not put a cap on the cash out amount and is able to extend the credit for any real purpose. Standard loans that normally are limited on the cash-out amount.

3). Preferential bank treatment

Banks prefer medical professional clientele due to not only the low risk profile, but also due to consistency of income, essential work, and low risk of unemployment. Preferential treatment can mean that they are offered low to no fee products, much lower interest rates and the ability to borrow more with fewer fees.

4). Private banking

Medical professionals may also receive the opportunity to use private banking services from a financial institution. Private banking gives access to personalize banking services that are designed around their specific needs. For instance, a private bank client can receive financial advice, lower interest rates on loans, customized banking services, higher investment yields, and hassle-free transactions. Including estate planning and a high tier banker that has significant experience in commercial and residential fields.

business loans and home loans

Frequently asked questions

Q. Do all lenders offer a medical loan?

Majority major lenders have a medico division or offer preferential services to for doctors, surgeons and other medical specialists. However, some of the smaller lenders may not have a bias and do not offer exceptional services.

Q. What turnaround times can I expect on my loan?

This depends on the lender, at Borg Financial we pick the lender based on your needs and circumstances, if you are seeking a quick turnaround, we will prioritize the lender that will get this done promptly.

Q. When the loan is approved, when can I receive funding?

After the loan has been formally approved, you will require to sign loan docs then be booked for settlement which can take anywhere from 1 to 2 weeks.

Home Loans for Doctors

Home loans for doctors follow many of the same rules that business loans do. This means home loans are easier for doctors to access and often more flexible, as income is considered more stable than other professions. Additionally, doctors often get special privileges when it comes to doctor home loans. Terms will depend on your income, current situation and property value however, so it’s important to make sure you’re eligible for the loan you want.

Home loans for doctors allow you to buy a new home, refinance your existing home loan (for a change of loan or in the event of a change in profession), buy an investment property, or even renovate your home.

If you’re building or buying your first home, you may also be eligible for the First Home Owner Grant, which can give you an immediate boost to your buying power.

What are the Best Home Loans for Doctors?

The best home loans are the ones that can be tailored to your needs as a professional. Home loans can be structured in a variety of different of ways, which is great for ensuring you get the best possible results from your home loan. However, it also means there’s no “one sizes fits all” solution. If you’re comparing home loans for doctors, you need to take into account the fact that most home loans will need to be arranged around your unique requirements. If you don’t have the experience or confidence to manage your doctors home loan from start to finish, you may require the services a broker or specialist.

For more information on home loans for doctors, discuss your needs with an expert at Borg Financial today.

HOME LOANS FOR MEDICAL PROFESSIONALS

Here’s a look at some of the major benefits that medical professionals can get when taking out a home loan at many banks and financial institutions.

1). 90% to 100% home loan funding for home purchases

While many lenders will have to put down about 10% to 20% of the purchase price as a down payment, medical professionals may be able to secure 90%, 95% or even 100% home loans for their home purchases. This can help free up your money to fund your practice for equipment upgrades, staffing, marketing, or even building construction.

2). No lenders mortgage insurance (LMI)

You may not have to pay Lenders Mortgage Insurance (LMI) which is usually required for home purchases who put less than 20% down on their home purchase. Not having to pay LMI can offer you significant savings over the life of a home loan. In fact, you can save tens of thousands of dollars when not paying Lenders Mortgage Insurance.

3). Better interest rate terms

Medical professionals can also receive better interest rate terms on their home purchases. Over the life of a home loan, this can allow you to have lower monthly payments and save a significant amount of money.

As an example, let’s take a look at two home mortgages. One is a 30-year $500,000 mortgage at 4% while the other is a 30-year mortgage at 3%. Here is a look at the major statistics of these two similar home loans.

Monthly payment at 3%: $2,391.35 Total interest paid: $258,887.26
Monthly payment at 4%: $2,670.41 Total interest paid: $359,347.53

As you can see, with a 1% discount on the interest rate, your monthly payments would be $278.66 less expensive each month.

Over the life of the home loan, however, you would end up paying $100,460.27 in interest payments!

Frequently asked questions

Q. Will I still qualify for a LMI free loan if my spouse is not in a medical profession?

Yes. Consideration for an LMI free loan doesn’t require both members of the household to be medical professionals.

Q. Can I use a First Home Owners Grant as part of the deposit?

Yes. You may be able to use the First Home Owners Grant as part of your deposit on your first home purchase if constructing or buying newly established.

Q. What documentation do I need to confirm my employment position as a medical professional?

You need to provide your medical registration with the Australian Health Practitioner Regulation Agency as well as your financials or an employment contract.

Better Business and Home Loan Opportunities

Financial institutions are eager to offer business and home loans for doctors and similar professions. If you are considering a business or home loans, then please contact Borg Financial to assist with all your loan requirements. We’re a leading mortgage broker, offering support and advice for all things loans.

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