Loan Against Rent Receivables

Apart from the above basic criteria, depending on individual banks, further details might be added to the eligibility conditions.

Documentation Required for Loans against Rent Receivables

Loans against receivables is a security based loan and thus requires all valid documents pertaining to the identity of the owner, the tenants and the authenticity of the property in question. The following are a list of common documents that might be required by banks -

1. Loan application form
2. Photograph
3. Identity proof
4. Residence proof
5. Educational qualifications certificate, latest 3 months' salary slip and/or proof of business existence
6. Form 16/ITR or latest 3 years' Income Tax returns or business profile
7. Latest 6 months' bank statement or last 3 years' profit/loss and balance sheet
8. Processing fee cheque
9. Property related documents
10. Title of ownership of property
11. Approved sanction/building plan

Details about Loans against Rent Receivables

The tenure for which the loan is provided could be as high as 10-15 years and would vary from bank to bank. The tenure allowed would also be based on the credit rating of the customer.

Based on the market value of the property, the maximum amount of loan is decided. Most banks consider allowing a loan amount that is between 70-90% of the market value of the property.

The higher the lease or rental period in the agreement, the lesser will be the proportion of the loan repayment amount from the rental amount.

Benefits of Loans against Rent Receivables

A personal loan by all purposes, a loan against rent receivables is much better than a conventional personal loan. The following points outline how such a loan is a better choice to opt for -

• Approval Time - Since the loan is given based on the security of rent amount coming from an immovable asset, there are lesser verifications to be done and processing happens way more quickly
• Interest Rates - Since it is a security-based loan, banks generally offer better and lower interest rates on the loan amount and thus it turns out to be less of a burden financially
• Repayment Tenure - Longer repayment periods of up to 10-15 years as compared to 4-5 years in case of conventional personal loans
• Loan Amount - The loan amount is based majorly on the market value of the property and thus can facilitate a larger sum of financial help

A good credit score can help you secure lower interest rates on loans and credit cards.

Get Free Credit Score