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    Lease Rental Discounting

Lease Rental Discounting (LRD) is a term loan offered against rental receipts derived from lease contracts with corporate tenants. The loan is provided to the lessor based on the discounted value of the rentals and the underlying property value.LRD is typically offered against commercial property.

Rent receipts are payable by the tenant directly to an escrow account with the lending bank.Rental income is credited in this account and EMI is deducted of it.

The underlying tenanted property, which may be commercial property or quasi commercial property will be taken as collateral. No plot, self construction or under construction properties will be allowed.Bank also see that future rental from the property re secured .

Product features :-

  • Max Loan tenure - Duration of lease left.
  • Max Loan amount - 70 to 75% of net rental divided by per lakh emi of the tenure left , subject to 60% of market value .
  • No income tax benefit .
  • Loan foreclosure penalty - Means paying off the complete loan at one go.Most of the bank charges 2 to 3% of principal outstanding as penalty .
  • part payment - Means paying some part of loan.Most banks don't charge any penalty
  • Co-applicant - Most of the banks ask for co-applicant .Co-applicant in case of
  • Individual  - spouse,parents
  • Director  - spouse , parents , pvt ltd company , other directors .
  • Partner - spouse , parents , partners .
  • Co-owners of property need to be co-applicants in loan . 

Loan process

3 documents are required for a loan to get disburse

  1. Sanction letter: - Loan sanctioning is based on the financial documents,personal documents and past credit history of the borrower.  Based on the information provided banks calculates the loan eligibility and decides on the loan amount.

    Documents required for loan sanctionning are :-

    Documents in case of salaried
    Documents in case of sole proprietor (proprietorship)
    Documents in case of partner (partnership)
    Documents in case of director (private limited company)

  2. Legal report: - In this complete chain of property documents , starting from allotment of the property till the last transaction , are required . Based on these documents  legal report is made.

  3. Technical report: - In this approved map by municipal authority is required and based on it  physical verification of the property happens. Certain things are checked like area of property , usage of property(Residential or commercial) and based on it  report is made .

If all the 3 documents are approved by the bank , disbursement documents are signed and cheaque is made in name of lesse .
This complete process takes 15 to 18 days , subject to complete documents are provided by the borrower .







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