LRD (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 lesser based on the discounted value of the rentals and the underlying property.
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General Process of LEASE RENTAL DISCOUNTING and Steps Involved
1. Check your eligibility for LEASE RENTAL DISCOUNTING
Lenders offer the loan amount basis the Valuation of the Property, Rental Income Received, Lessee Strength and balance Lease Tenure. At MONEY NETWORK our superb back-end algorithms and experienced team strives to give you adequate information about eligibility and consequently takes you to the right fit.
2. Choose the best deal post evaluation
Fundamental parameters like interest rates, application fees, processing fees and legal charges of different banks must be compared first before making the best choice. You can refer to the comparison chart of LEASE RENTAL DISCOUNTING interest rates at MONEY NETWORK to give you a crisp and clear look at different interest rates of top notch banks.
3. Apply for Lease Rental Discounting
Once the lender has been selected you have to fill the application form and give all the required information about your financial assets and liabilities; property details and other personal and professional details. Our team at MONEY NETWORK helps in fulfilling such responsibilities.
4. Documentation and Verification Process
LRD caters largely to the Self Employed segment and a lot of documents are needed for Income assessment. Multiple iterations are possible in terms of Fresh Documentation requirement by the Lender. They have to be synced with the details in the application. Our Experts use their knowledge and Experience in the best possible way to ensure a hassle free processing of your Loan.
5. Credit and Default Check
Bank checks the Lease Rental Discounting eligibility of the borrower and also the credit history is checked through CIBIL score. This score is highly influential in the approval of the loan amount. A customer holding low credit score leads to straightaway rejection of the application, as it implies earlier credit defaults. Whereas a high credit score is favourable for the approval of application of Lease Rental Discounting. We update you well in advance weather your CIBIL score is enough for you to apply for loans. CIBIL score also helps in getting the best rate of interest.
6. Legal and Technical Clearance of the Property
Legal documents of property are asked from the borrower to check its authenticity and for security of the loan amount given. Next is the valuation of property determining the loan amount which can be given by the Bank with the property to be mortgaged as the collateral, as LTV for each bank is pre-defined.
7. Bank sanctions loan and issues a sanction letter to the borrower
Once the credit appraisal of the borrower is done, the bank decides final amount and sanctions the Loan. An offer letter is sent to borrower which has details like loan tenure, repayment options and rate of interest.
8. Acceptance Copy to the Bank
Once the borrower agrees with the terms and conditions mentioned in the offer letter he needs to send an acceptance copy to the bank.
9. Opening of Escrow Account
The repayment of the loan is from a new Escrow account opened either with the lending Bank or; if it is a Financial Institution; with a designated bank as per the lender. It also requires a letter of confirmation from the Lessee that they will deposit the rent in the new Escrow Account.
10. Signing of agreement and the loan disbursal
Bank disburses the loan amount once the borrower signs the Disbursal Documentation and submits the Original Property Papers/ Assurance that the same will provided within a stipulated Time period.
REQUIRMENT OF DOCUMENTS
Generally all lenders follow same guidelines for collecting elementary documents. However there may be little variation with subject to specific requirements. Below listed are the documents that is required to process the loan faster. Self Attested copies of Documents are solicited.
- The Signed application form duly filled with photograph
- ID/ Age Proof – PAN Card/ Passport/ Aadhar Card and Residence Proof OF Passport/ Utility bills/ Bank Statements.
- Cheque of Processing Fee
- Registered Lease Rental Agreement
Salaried Individuals
- Last 2 years Form 16 or Income Tax Returns
- Last 3 months salary slips
- Last 6 months bank statement reflecting salary credits
Self employed Individual/ Proprietorship
- Proof of Business- Shop and Establishment Certificate/Vat Registration Certificate/ Service Tax Certificate
- Last 3 years IT tax returns with profit and loss account and balance sheet duly audited by CA
- Latest 12 months bank statement- Savings Account and Current Account
- Existing Loans Sanction letters accompanied with repayment track
- Business profile on the letterhead of the company
Partnership Firm/ Partnership LLP
- Age proof of all the partners in the form of PAN Card, Passport or Adhar Card
- PAN Card of the company
- Residence proof of all the partners –Utility Bills/ Passport/Bank statement/ Registered rent agreement
- Proof of Business- Shop and Establishment Certificate/Vat Registration Certificate/ Service Tax Certificate
- Latest 3 years Income Tax returns with profit and loss and balance sheet duly audited by CA.
- Latest 12 months bank statement of the Company and of the Partners Savings Bank Account
- Partnership deed
- Existing Loans Sanction letters accompanied with repayment track
- Business profile on the letterhead of the company
Private Limited / Limited Company
- Application form duly filled with photographs of directors.
- Age Proof of Directors- PAN Card, Aadhar Card, passport
- Residence Proof of Directors- Utility Bills/ Passport/Bank statement/ Registered rent agreement
- PAN Card of Company
- Education Qualification- A professional qualification certificate in case of Doctors/CA/Architects
- Proof of Business- Shop and Establishment Certificate/Vat Registration Certificate/ Service Tax Certificate
- MOA, AOA, List Of Directors, Share Holding Pattern of the Company
- Last 3 years IT returns with Profit and Loss account and balance sheet duly audited by CA.
- Latest 12 months bank statement of Company of all current accounts and the same for Director Savings Bank Account
- Existing Loans sanction letter with repayment track of company and Individual Directors
- Business Profile on the Letter Head of the Company
Property Documents
- Occupancy Certificate
- Approved Plan of building
- Share certificate copy
- Chain of deeds in case of resale property
- Property Card
- Nil Encumbrance Certificate- EC ( if applicable)
- Current Sale agreement/ Draft Agreement.