Finance Against Your Rental Income!
Lease Rental Discounting (LRD) enables property owners to convert future rental earnings from commercial spaces—such as offices, retail outlets, or other leased properties—into immediate funds. It’s a smart way to access capital without selling your assets, helping you meet financial goals with ease.
Whether you’re looking to expand your business, manage cash flow, or invest in new opportunities, LRD offers a secure and structured financing option. With steady rental income as the foundation, you can unlock liquidity while retaining ownership of your property.
Flexible tenures, competitive interest rates, and quick processing make Lease Rental Discounting an ideal solution for property owners seeking financial growth.
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What is Lease Rental Discounting (LRD)?
Lease Rental Discounting is a type of loan offered against the rental income of a commercial property. The property owner can avail a loan by pledging the future rent receivables from tenants, with the leased property serving as collateral.
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Who is eligible for an Lease Rental Discounting?
Lease Rental Discounting are typically offered to property owners with valid lease agreements, developers or companies owning leased commercial spaces, individuals with long-term lease rental income. Eligibility depends on tenant profile, lease tenure, property value, and rental income.
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What types of properties are eligible for LRD?
Commercial properties such as, Office Buildings, Retail Outlets, Malls, Warehouses, IT Parks are commonly considered, provided they are leased out to reputable tenants with registered lease agreements.
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What is the loan amount I can get under LRD?
The loan amount usually ranges from 60% to 80% of the discounted value of future rentals, subject to the value of the property and lease terms.
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How is the loan amount calculated?
The lender calculates the present value of future rental cash flows, typically for the duration of the lease, applies a discounting rate, and then offers a percentage of this value as the loan.
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What is the tenure of a Lease Rental Discounting?
Tenures generally range from 7 to 15 years, but may vary based on the lease duration and borrower's profile.
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Can I prepay or foreclose the LRD?
Yes, most lenders allow prepayment or foreclosure, though charges may apply—especially for fixed-rate loans. Terms vary across lenders.
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Do I need tenant's consent for LRD?
Yes. Lenders usually require tripartite agreements or a NOC from tenants, agreeing to redirect rent payments to the lender’s escrow account during the loan term.
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What is an Escrow Account in Lease Rental Discounting?
An Escrow Account is a designated bank account where tenants deposit rent directly. The lender uses this to recover monthly EMIs, ensuring regular repayment.
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Can the lease be renewed during the loan tenure?
Yes, but the lender’s consent is typically required for lease renewal, replacement of tenants, or significant changes to rental terms during the loan term.
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What happens if the tenant vacates before the lease ends?
Early termination or tenant default can impact your ability to repay the loan. In such cases, lenders may require replacement tenants quickly or restructure the loan or enforce legal rights over the property, if repayment fails.
