Owning a residential housing property in india offers several benefits, including the ability to generate rental income by leasing out the space. You can utilize the rental income from your commercial property, whether it's a warehouse, hotel, school, or hospital, to secure a loan for your business or personal needs through lease rental discounting (lrd). Lrd is a term loan secured by rental receipts, allowing tenants to finance leased contracts and shift their balance as needed. Let's explore the meaning and benefits of lease rental discounting in this article.
Lease Rental Discounting (LRD)
Make the most of your rental receipts to achieve your professional and personal goals with Lease Rental Discounting (LRD).
LRD loans are based on the fixed rent owed to rental properties. Property owners and tenants sign a contract requiring regular rent payments, which can be used as collateral when applying for a loan. Rent is paid directly to the bank as an EMI instead of to the owner, simplifying the process. Depending on the bank, loans of up to 70% of the property value can be obtained.
Additionally, lease rents are guaranteed by the rental cash flow, not the property itself, requiring negotiations between three parties: the creditor, the lender, and the tenant. This arrangement allows property owners to leverage their assets more effectively by taking out loans against the property's capital value and cash flow.
Advantages of Lease Rental Discounting (LRD)
- Business Expansion: LRD loans enable property owners to expand their businesses.
- Tax Benefits: Owning more land provides opportunities for tax deductions.
- Balanced Cash Flow: EMIs are paid with rent money, ensuring a balanced cash flow for borrowers.
- Lower Capital Expenditure: Bank loans significantly reduce personal expenditure when investing in assets or enterprises.
- Quick Loan Disbursal: Our team ensures a swift application review and approval process.
- Longer Repayment Period: Longer repayment periods allow for lower monthly payments, enabling borrowers to focus on other financial obligations.
Documents Needed for Lease Rental Discounting
To apply for LRD in Bangalore, you'll need:
- A filled and signed application form.
- KYC Documents: Passport, voter ID, driver's license, or PAN card.
- Address Proof: Ration card, utility bills, rental agreement, etc.
- Bank Account Statements (last six months).
- Salary Slips (last three months).
- Income Tax Returns (last three years).
Qualification for Lease Rental Discounting
Salaried individuals, those with existing practices, or self-employed individuals are eligible for LRD. Additionally, partnership companies, private and public limited enterprises, and proprietorship companies qualify.
LRD is an efficient way to expand a growing business, leveraging rental property without significant personal capital expenditure. It's a balanced tool for individuals and businesses seeking portfolio diversification without hefty investments.
The property serves as collateral, and the bank offers low-interest loans with repayment terms of up to 20 years for salaried employees and up to 15 years for self-employed individuals.
Contact Kare Financial Services today to explore your Lease Rental Discounting options and achieve your financial objectives.