Lease Rental
Discounting
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Lease Rental Discounting
Lease rental discounting (LRD), also known as a loan against rent receivables describes the loan as calculated based on the rent that which landlord receives from the tenants. Lease rental discounting offers customers a loan for future rentals of their commercial, residential, godown, industrial, etc. that has been lent, leased, or rented.Â
The loan granted against this scheme is generous and convenient for those planning to refurbish their property and improve their rental aspects provided that the tenant has a strong financial presence with a sizable turnover. The customers can negotiate with lenders to get the best deals and lower interest rates on their loan amount under categories A, B, and C varying depending on the tenant’s financial standing.Â
This is a great option for those who need extra cash flow or for those who want to consolidate their debts.
However, a lease rental discounting loan can be processed only when rent (Minimum ~ 1 rent) is credited to the account and also a rental agreement is in place. The tenure of the loan however will depend on the tenure of the lease period, positioning it as versatile.
Unique Points & Features
Avail of loans up to 70% – 90% of the property market value
With several banks working towards providing their customers with the best deals in the market, many offer a lease rental discounting loan amount of up to 70% to 90% of the market value of the requested property.
Flexible and longer repayment tenors
Repayment periods for a loan against rent receivables are long, with some extending up to 15 years. With such flexible and longer repayment periods, the customer can repay his loan comfortably.
Lower interest rates
Compared to personal loan interest rates, a loan against rent receivables has lower interest rates, some as low as 7.50%.
Ease of repayment
The loan against rent receivables provides ease of repayment with the customers repaying the loan with the acquired rent.
Instant approvals
Approval time on lease rental discounting loans is quick. With minimal documentation and an easy loan process, the loan amount approved is quickly dispersed at Loanz360.
Doorstep service
Commuting between banks is a huge burden with the time and cost being wasted. Get your documents delivered to your doorstep without having to break a sweat.Â
Eligibility Criteria
Age: 21 – 65 years (Conditions Apply)
Type of Employment: Salaried/Self-Employed/Business Owner(Govt, Large Enterprises, Etc.)
Nationality: Resident of India
Income: Monthly Minimum ~ Rs. 10,000/- and above (Salaried/Self-Employed), Minimum ~ Rs. 2,00,000/- p.a onwards (Business Owners)
Credit/CIBIL Score: Any profile(Credit score ~ 650 or above has a higher chance of getting a quick and instant loan with high funding at lower interest rates)
Employment Stability: 1 – 3 years and above (With a stable income and continual flow of money)
Note: The eligibility criteria mentioned above are generic and may vary from lender to lender. Please reach out to us at Loanz360 for a personalized eligibility chart.
Documentation
Note: Documents requested may vary from lender to lender, contact Loanz360 for any inquiry.
KYC DocumentsÂ
- ID Proof – Voter’s ID/Passport/PAN Card/Aadhaar Card/GST Certificate(For Business Owners)
- Address Proof – Electricity Bill/Ration Card, Copy of Utility Bill/Insurance Bond/Income Tax Assessment Order/Property Registration Documents/Pensioner Book/Property Tax Receipt/Gas Book/Employer Certificate
Income Proof –Â
- Latest 1-year rental bank statements
- Copy of Income Tax Returns (ITR) – Self & Business
- Balance Sheet (C.A Certified)
- Profit and Loss Statements (C.A Certified)
- Business stability/Ownership proof (If applicable)
Additional Documents – Registered Lease Deed/License Agreement Copy (If Applicable)/Rental Agreement/Property Documents/Approved Plan
Charges & Interest Rate
CURRENT LEASE RENTAL DISCOUNTING LOAN INTEREST RATES START @ 8.90% P.A ONWARDS. Compare interest rates and check more deals offered on a loan against rent receivables by our financial partners at Loanz360 in 2022.
Bank Name | Interest Rate (P.A) |
HDFC | 10.75% onwards |
PNB Housing | 8.60% |
Bajaj Housing Finance | 7.75% |
Bank Of Baroda | 8.65% |
Bajaj Finserv | 11.75% |
Kotak Mahindra Bank | 9.50% |
Axis Bank | 11.40% |
Aditya Birla Finance | 11.25% |
SBI | 9.45% |
ICICI | 8.75% |
Note: Our financial partners are not limited to the above-mentioned banks. Contact Loanz360 to discuss options. The interest rates may vary subject to conditions.
FAQ
Lease Rental Discounting is a Term Loan offered against income-producing commercial assets/property. The LRD Loan works on the premise that your leased property derives fixed rent, which you can use as ‘Collateral’ to generate funds, instantly. With this loan, you can easily get the financial assistance you need without having to put your property up for sale.
With this loan, you can easily get the financial assistance you need without having to put your property up for sale.
You can get a loan of up to 50 lakhs or more on the loan against rent receivables depending on the bank and the financial lender.
With Loanz360, you can avail of a loan from 50% to 90% of the market value of the property.
Yes. You can avail of tax benefits, attractive interest rates, and better deals with a lease rental discounting at Loanz360.
Lease rental discounting (LRD) is a type of term loan in which the loan amount is based on the underlying value of the property and the discounted value of rentals derived from lease contracts of the property.
Rentals can be combined with other incomes from business or salary to arrive at eligibility. The terms can be negotiated with the lenders to avail of a loan.
Yes, overdraft and Flexi options are available on lease rental discounting loans. Contact loanz360 for more information and get the best deals and offers on your loan today.
Yes. You can get a top-up loan on the existing loan to increase funds.
Up to 70% of the value of the property mortgaged, or up to Rs. 50 crore of net rent receivable for the residual lease period, whichever is less.
Banks only allow rentals from corporate or standard tenants to be credited into the account and also check whether the landlord is showing the rent in the ITRs.
The tenure of the loan is given only for the remaining period in the rental agreement. A few banks & NBFCs consider even giving up to 10 years – 15 years even if the tenure of the agreement is less than the 10yrs when the tenant is financially strong or considering other incomes of the landlord. For more information regarding the loan, contact Loanz360.
Lenders check the rental agreement and tenure for which the property is leased out. However, lenders also examine the rental behavior (if the rents are credited in due time) to process the loan and also check whether the landlord is showing the rent in the ITRs.
If the rental crediting is considered erratic (inconsistent), the chances of acquiring a loan are difficult, but not impossible. Customers at Loanz360 can provide support documents with other incomes to increase the eligibility prospect of the loan. Contact Loanz360 for more information.
Yes. You can provide support documents with other incomes for your loan. For this, we need to open an escrow account and should NOC from the tenant to credit rents in this escrow account instead of the landlord account, so that the banks can collect the EMI directly from the escrow account. Sometimes when banks/NBFCs do not open an escrow account they directly lend a loan to the landlord and the landlord needs to pay through ECS or NACH.
Only rentals from corporate or standard tenants should be credited into the account.
80-85% of the net rental is considered while calculating the lease rental discounting.
If you’re looking to take out a loan against your rental receivables in India, there’s no better place to turn than Loanz360. Here, you’ll be able to take advantage of competitive interest rates and flexible repayment terms. Plus, you’ll have peace of mind knowing that your loan is backed by a reliable financial institution.
