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Lease Rental Discounting enables you to encash your current rental cash flows and avail long term loan facility. The funds may be used for Business Expansion, Business Capital Requirements or Consolidating Obligations. Lease Rental Discounting loans can be availed by Salaried, Self Employed Professionals and Self Employed Non-Professionals
- Maximum Loan Amount.
- Maximum Tenure.
- Door step services.
- Low Rate of Interest.
- Easy Documentation.
- Min and Max Loan Size -Avail loan from 15 Lacs up to 10 crore.
- Tenure – Depends on existing lease agreement terms.
- Door Step Service
Loan Against Future Rent Receivables has been developed considering the growth potential in the real estate in various metros and urban centers, where many commercial properties/shopping malls are being developed and the owners approach banks for loans against securitization of future rent receivables from such properties.
This type of loan is generally available to individuals who own a property that has been rented out to blue chip companies, multinational companies and public sector companies. However, certain banks offer this loan only to those individuals who own commercial property.
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Before offering this loan, the banks will take care to ensure that he following conditions have been met
- The property has been rented out.
- The property has been built according to the plan approved by the local government authorities.
- There is a confirmed lease agreement between you and your tenant.
- You and your tenant are worthy of giving credit.
Certain banks allow you to open multiple rent loan accounts if the tenants are many. In order to avail this loan, you must fill out the usual application form. You need to submit a proof of identity like passport, voter ID, ration card or PAN card.
You should also submit your photograph along with last six months of bank statements. Moreover, most banks require you to submit tenancy agreement, signed between you and the tenant, the authorised building plan, title or lease deeds and the most recent property tax receipt as well as rent receipt.
In case of certain banks, you may be asked to provide income tax returns or income tax assessments of the last three years, as well as the certified balance sheets or P&L accounts of the tenants for the last three years.
Once your papers are in order, the processing of your loan application begins. You can expect to get up to 90 per cent of the discounted value of future rent receivables. The interest rates vary from bank to bank. While most of the banks charge floating rate interest on this type of loan, certain banks do have the fixed interest rate option as well.
Customers who own properties in metro/ urban/ semi-urban areas, who have rented out their properties to Public Sector Undertakings/ Government/ Semi-government / Reputed Corporates, Banks, Financial Institutions and Multi-national Companies can avail loan against future rent receivable.
Your eligibility is computed on the basis of the rentals that you receive against the property.Your EMI can be up to 70% of the gross rental income or 90% of the net rental income whichever is lower.
- Duly filled Application Form with Photograph.
- Age Proof (PAN Card, Passport, Any other Certificate from Statutory Authority).
- Residence Proof (Passport, Driving License, Telephone Bill, Ration Card, Election Card, Any other Certificate from Statutory Authority).
- Last 3 years Income Tax returns (self and business) with Profit and Loss Account and Balance Sheets duly certified/audited by a Chartered Accountant.
- Processing Fee Cheque in favour of bank.
- Photocopy of Title Documents of the Property, Approved Plan.
- Copy of Registered Lease Deed
- Last 6-12 months Bank Statements which reflect the Rental Credits in the Account.
- All documents need self-attestation.
- Who can avail a Lease Rent Discounting (LRD) loan?
- Salaried Individuals
Any individual who is in permanent service in any government undertaking or any reputed private sector company in India. We also offer loans to salaried Non Resident Indians (NRIs) working with reputed companies in select countries. - Professionals
Professionals i.e. allopathic doctors, architects, chartered accountants, cost accountants, practicing company secretary, management consultants and lawyers. - Self Employed
Individuals like traders, distributors, manufacturers, service providers etc. - Non-Individual Entities
- Proprietorship Firms, Partnership Firms, Private Limited Companies, Public Limited companies.
- Salaried Individuals
- How much finance can I avail against the property value?
You can borrow up to 70 % of the market value of your property subject to your income eligibility. - I do not have documented financials but I do have the repayment
capacity, will I get a loan?
Your eligibility is computed on the basis of the rentals that you receive against the property.Your EMI can be up to 70% of the gross rental income or 90% of the net rental income whichever is lower.
- For how long a period can I get loan?
Lease Rent Discounting (LRD) loan can be availed from minimum 3 years to maximum 10 yrs. The term for the loan will be restricted to the retirement age or 60 yrs at loan maturity for salaried customers and 65 years for self employed customers.
- Do I need a co-applicant?
Yes. All the co-owners of your property will have to sign up as co-applicants. For a sole property owner or applicant, one adult member in the family will need to sign up as a coapplicant. In case of partnership firm or a company, partners and promoter directors respectively need to be co-applicants.
- What do I need to give as security?
Rentals are payable by the tenant directly into escrow account with bank. The underlying leased property, which may be commercial or residential property, will be taken as collateral. Only completely constructed properties are eligible under this program.
- What is the applicable rate of interest?
The rate of interest varies depending upon your loan amount, property type, lessee profile, rental income etc and this will be communicated to you by our sales representatives.
- Do I have the option of pre-paying the entire loan amount?
Yes. One can pre-pay the loan at any time after 6 months from the date of final disbursement ofthe loan. Foreclosure charges will be levied as applicable.
- Can I make part pre-payment?
You can make part pre-payments of a minimum amount of Rs 50,000 after 6 months from the date of first disbursement of the loan. This payment can be made only once in a financial year subject to a maximum of 25% of the balance outstanding against your loan amount at the time of request. All part prepayments made 12 months prior to the foreclosure of the loan will be charged at the applicable foreclosure rate at the time of foreclosure.
- How do I repay the loan?
The repayment towards your loan will be from the escrow account opened exclusively for collection of the rentals from the lessee occupying your property.
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What People Say
The people at Asset Financial are highly credentialed financiers who conduct themselves very professionally. They have been able to structure, source and deliver quality funding packages in varying markets over a sustained period and I have no hesitation in recommending them.
They made the loan process very easy and convenient to go through. A perfect place for loan transactions.