Swap or Rent™ July 26, 2019 no responses

Lease rental discounting is basically a term loan tailored for people who have significant rental income. When someone applies for this type of term loan, he/she needs to pledge the future rental income to the lender. The borrower gets the loan upfront in lieu of rental income which will come to them over a certain period of time.

This loan is quite useful for people who get a significant rental income but are unable to leverage their property directly to avail a loan against it. For instance, if you have availed a loan against your property, you cannot leverage it again for obtaining loan money. Instead, you can opt for lease rental discounting option and pledge future rental incomes from that property to get the money.

Points to Remember

It is important to remember that you can avail only 75-80% of the value of rental income for the remaining lease period as loan amount. Also, compared to other property-based loans, duration or tenure of such loans is shorter because it is linked to the time remaining for the lease to expire. If you are able to demonstrate the ability to pay installments for such loans, there are many lending institutions that can discount up to 90% of the value of the remaining lease on your property.

This type of loan is a great way of generating funds from owned assets. The amount can be used for further investments. Owners can foreclose their loan anytime during the loan tenure. However, depending on the type of lender they have chosen, they will have to pay foreclosure charges. For instance, if someone wishes to foreclose their loan within 48 months of taking the loan, they will have to pay a certain amount as foreclosure charges.

If you wish to avail lease rental discounting and encash current rental cash flow to avail a long term loan, make sure you have chosen a reputed lender. You can either ask for recommendations from your friends and family or look for reliable lenders on the internet. Once you have narrowed down few names, you can get in touch with each lender and ask them about the documentation requirements and charges you need to bear. Comparing all these factors will help you decide which lender will be the best choice for you.

Eligibility Requirements

Lenders look for several factors before offering this term loan to the borrower. If you are also planning to apply for a loan against property or home loan in Mumbai here are few factors on the basis of which your eligibility will be determined by lenders:

The lender or bank will also be considering the type of property you will buying

Summary

Planning to apply for lease rental discounting? There are several lenders that offer loan against property or home loans in Mumbai so choose wisely.

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