For many people in India, whether salaried or entrepreneurs, staying in a home of their own may not be practical for many reasons, which would result in having to stay in rented homes for a couple of years before they buy their own residence. The increasing number of young professionals who are moving to urban areas on account of their jobs means there is more demand for rented homes. This demand has resulted in high security deposits for rental homes, often equivalent to 6 or 11 months of the monthly rent.
Not everyone may have enough money in hand to be able to afford to pay a large amount as a rental/security deposit on their rented flat or house. This is especially true for youngsters who may be just starting out on their careers and have no savings to speak of. While one solution maybe to take a loan or request money from loved ones, that need not be the only way to arrange the much-needed finance for your rental deposit. Many financial institutions have now come up with a solution for this common problem – by offering rental deposit loans.
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Rental deposit loans are the loans provided to meet the financial requirements of your rental or security deposit.Benefits of rental deposit loans
Whether you are moving to a new city on your first job or you are a veteran with more than one job under your belt, moving can incur many expenses that can be a drain on your savings or budget. You not only have to take care of the security deposit of the new home, you also may need to pay for packing and moving your things from one city to another. Even if it is your first move and you don’t have any goods to move from one city to another, you would still require money to settle down and set up your new home. Whether it is furniture or furnishings, electronic appliances or kitchen utensils, there are many expenses that have to be met.
Taking a rental deposit loan helps you to avoid dipping into your savings for the security deposit. This can leave you with more money in hand to spend on packing and moving or for settling down in your new home. A rental deposit can ensure that you have a more comfortable, convenient, and secure lifestyle as soon as you move into your new home.Security deposits
The amount of security deposit that you have to submit will depend on your monthly rental, so it can run into thousands or even lakhs. The security deposit is transferred to the landlord who returns it to the tenant either when the lease period is over or when the tenant vacates the rented property. An agreement to this effect is drawn up between the landlord and the tenant.Details of rental security deposit loans
A rental security deposit loan can range in amount from Rs.1 lakh to Rs.5 lakh. The loan tenure can range from 11 months to 33 months, which depends on the tenure of the rental agreement. Until the rental lease is terminated, the borrower has to pay only the interest on the rental deposit loan.
Check Out: How to Use PF for Fianance Home Purchase
The application process for a rental deposit loan is easy and quick but may depend on the lender as well. Most lenders have the option to make an online application for a rental deposit loan, so all that one has to do is visit the lender’s website, fill up the application, upload the required documents, and wait for approval.
Usually approval is given within 24 hours of the application being submitted and depends on all documents being verified to be accurate.
Check Out: Guide to Home Loan Application
The loan has to be repaid in regular Equated Monthly Instalments (EMIs) which are lower than the EMIs for home loans. You can choose between different rental deposit loans offered by various lenders to select the one that is best suited to your requirements and convenience.
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