Benefits of Applying for Lease Rental Discounting

Did you know you can generate funds from your residential or commercial property? Your property will not only get you rental income on a monthly basis but the rent receivable will also help you yield more benefits in terms of funds.

Lease rental discounting is a type of term loan that you can raise against the rental income of your commercial or residential property. The funding you obtain from the loan can be used for personal as well as business purposes. This type of term loan is approved against the current market value and discounted rentals of the property.

In this case, the loan agreement is made between the lessee, lesser and the lending institute. The lesser doesn’t collect the rent because the amount gets credited on a monthly basis to the lending institution through an escrow account. The current occupant or the lessee is required to deposit the rent in the escrow account directly.

So, if you are looking for a short term loan for personal or business needs, lease rental discounting is the best option to look out for. Just make sure your property has a registered agreement between you and the lessee before you approach a lending institution.

Here are few points that you need to know about this type of loan:

• For collateral, you need to present a residential or commercial property that is on lease
• This loan can be taken for a tenure of up to 9 years
• You cannot obtain more than 70% of the property value as loan amount
• You can get the funds at an attractive interest rate, if you negotiate

Whether you are applying for a lease rental discounting loan or you need loan against property, make sure you are choosing a reliable and established lender.