Below listed requirements can be met by applying Lease Rental Discounting:-
- Expanding business venture
- Working Capital Requirement
- Generating more assets
- Generating higher yields from the business
A processing fee of up to 1-2 % of the loan amount plus tax is applicable.
Your Rental income from the Concerned Property, Lessee Strength, Remaining Lease Tenure and the Market Value of the Property are the Important Criterion for determining LEASE RENTAL DISCOUNTING eligibility.
EMI is referred to â€œEquated Monthly Instalmentâ€� which is the amount to be paid monthly on specific date until the loan is fully paid. The two major components of EMI are the principal and interest which is designed in a way that during the initial years the interest component is higher than the principal component. It is generally taken from the Escrow account opened.
The estimated amount that is expected to be quoted for the property according to the prevailing market conditions is how the market value is ascertained. It is ascertained by a third party valuer empanelled with the respective bank.
The entire Interest Paid Component can be claimed as Business Expense to avail Tax Benefit.
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. It is advisable to keep at least one month rental in the account as a minimum balance, so that any delay in rent does not affect EMI Repayment of the borrower. It must be noted that the delayed payments would lead to penalty and also you may be subject to paying cheque bounce charges.
After the technical appraisal of the property and verification of the documents you can submit the request for the disbursement of the LEASE RENTAL DISCOUNTING through Loan street /bank Representatives.
Yes, the loan can be paid ahead of the schedule by making lump sum payment fully. However it will be subject to the charges that vary from bank to bank. Generally, they vary from 2-4 % of the Loan Outstanding at the time of Closure or Payment in Full.
Yes itâ€™s very important to insure the property for fire and other hazards during the pendency of the loan. The bank may ask for evidence of such insurance on any day. The bank from where the loan is disbursed is the beneficiary of insurance policy.
A fixed interest rate doesnâ€™t change during the tenure of a loan. The customer knows how much to pay exact amount in monthly instalments.
It refers to any type of debt instrument such as loan, bond or credit, that doesnâ€™t have a fixed rate of interest over the life of instrument.