What is Lease Rental Discounting?
Lease Rental Discounting is a loan facility available to owners of leased commercial or residential property, where the loan amount is determined based on the future rental income the property is expected to generate, and the property itself is offered as collateral. The lease/rent agreement is typically assigned to the lender, and the lender receives the rental payments to service the loan, while the borrower can access substantial funds against a stable, ongoing rental income stream.
LRD is a preferred financing route for property owners who want to raise a large amount of capital for business expansion, investment or other purposes, without selling their income-generating property.
How Lease Rental Discounting Benefits You
- Unlocks a lump sum amount against future rental income
- Property continues to generate rental income while pledged
- Longer tenures aligned with the lease agreement period
- Competitive interest rates due to the secured, income-backed structure
- Useful for business expansion, investment or large personal needs
Basic Eligibility for Lease Rental Discounting
- Ownership of a leased commercial/residential property with a valid, registered lease agreement
- Creditworthy tenant with a stable rental payment track record
- Property location and valuation acceptable to the lender
- Good credit score and repayment history of the property owner
- Remaining lease tenure sufficient to support the loan tenure
Loan Details
| Parameter | Details |
|---|---|
| Rate of Interest | 9.5% to 13.5% per annum |
| Professional Segment | 9% to 12% per annum |
| Minimum & Maximum Loan Amount | ₹25 lakhs to ₹25 crores+ |
| Minimum Work Experience | Not mandatory; based on rental income and lease tenure |
| Age Limit | Min 25 years – Max 65 years (at loan maturity) |
Documents Generally Required
- KYC of property owner
- Registered lease / rent agreement
- Property documents (title deed)
- Rent receipts / bank statements showing rental credits