Lease Rental Discounting
Lease Rental Discounting is a term loan that is offered using rental receipts as collateral and is availed by tenants against leased contracts. One can go for LRD, in case you own a property that renders you fixed rentals.
The process is streamlined as rent is transferred directly to the bank as EMI instead of going to the owner. Each bank works on its own criteria as far as the amount of the loan against property is concerned. But, on an average one can get up to 70% of the property valuation in loan amount.
Factors Considered by the Bank for Providing Loan
- Your eligibility to repay.
- Value of your property
- Other Assets you own
- Legality and technical aspects of your property
- Liabilities that might occur
Are You Eligible for Lease Rental Discounting?
Salaried individuals, professionals, and self-employed qualify for LRD. In case of non-individual entities, any partnership firm, private and public limited enterprises including proprietorship firms are eligible.
With renting property being the safest bet in the infrastructure investment business, Lease Rental Discounting is effective to expand a growing business. This can be ensured while keeping personal capital investment low. It is a balanced tool for individuals and companies looking to diversify their investments without putting in a large sum of investment.
The Benefits of Opting for Lease Rental Discounting
- Business Expansion: – The property owner can further invest in property using the loan acquired from LRD.
- Tax Benefits: – Tax deductions can be availed by owning more property.
- Balanced Cash Outflow: – The EMIs are taken care using rent money paid by tenants. Thus further revenue is generated through investments.
- Low Capital Expenditure: – The capital gained from bank loan helps in reducing personal expenditure to a great extent when investing in more properties or businesses..
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