Loan against Rent Receivable – All you need to know
Table of Contents
Loan against Rent Receivable – All you need to know
A synopsis of Loan against rent receivable
Meaning of loan against rent receivable. A loan against rent receivable is offered by every public and private bank to manage future rent on an owned property as collateral. It is like a personal loan. This loan can be taken to help in business activity , marriage or education , renovation , repair etc . A loan against rent receivable can be given to anyone who has any type of property that has been issued on a commercial basis.
Interest rates on loan against rent receivable
| Interest rate | @8.75% onwards | |
| Loan amount | From 25 lakhs to 200 crores. | |
| Processing fee | Up to 1% |
Interest rate and processing fees by banks in India
| Bank name | Interest rate | Processing fee |
| State bank of India | 10.70% | 1% |
| Union bank of India | 9.80% | 1% |
| Yes Bank Ltd. | 8.00% | 1% |
| RBL Bank Ltd. | 8.50% | 1% |
| Standard Chartered bank | 7.50% | 1% |
| South Indian Bank Ltd. | 10.70% | 1% |
| United bank of India | 10.75% | 1% |
| UCO Bank | 9.40% | 1% |
| Central bank of India | 10.10% | 1% |
| HSBC Bank | 7.50% | 1% |
| HDFC Bank Ltd. | 7.25% | 1% |
| Bank of India | 8.35% | 1% |
| Bandhan Bank Ltd. | 10.00% | 1% |
| Bank of Baroda | 8.00% | 1% |
| Axis Bank Ltd. | 7.50% | 1% |
| Canara bank | 11.50% | 1% |
| Citi bank | 7.20% | 1% |
| ICICI Bank Ltd. | 7.75% | 1% |
| Kotak Mahindra bank | 7.25% | 1% |
| Indian bank | 8.80% | 1% |
| IndusInd bank | 9.00% | 1% |
| IDFC First Bank | 9.50% | 1% |
| Indiabulls | 9.50% | 1% |
| Digibank (DBS) | 9.00% | 1% |
| Edelweiss Finance | 10.00% | 1% |
| Pnb housing | 9.00% | 1% |
| LIC Housing Finance | 8.00% | 1% |
| Punjab National Bank | 8.70% | 1% |
Merits of loan against rent receivable
- Amount of loan is directly proportional to market value of the property.
- 60% to 85% of property value can be given as loan
- Not much justification is needed as collateral is given , making the approval faster.
- Tenure period is flexible from 8 years , it can go upto 10 years also.
- Interest rate is low as it is a secured loan.
List of documents mandatory for obtaining a professional loan
- 2 Passport sized photographs
- Income Tax Return if the computation of income (if filed) for 3 years.-16
- Bank statement of salary account for 1 year.
- Complete property documents with ATS + MAP and Chain.
- Aadhar card and Passport
- PAN Card
- A Cheque for the processing fee.
- Permanent address proof and also needed if rented.
- Aadhar Card and Passport
- Appointment letter and salary slips of the previous 3 years
Eligibility criteria for loan against rent receivable
Business turnover , age, creditworthiness , repayment history all play an important role before getting a loan
- Age shall be between 24-60
- Minimum of 25 lakhs can be aviled as loan , the highest it can go up to 200 crore.
- The rent and lease agreement shall be properly made.
- Property shall be build under proper guidelines of the local government.
What are the factors that affect the eligibility of loans against rent receivable
- Age of borrower :
Applicants of age 25-30 can get a loan with comparatively longer period as their working hours are longer. For other applicants with nearby retirement age ,it would be shorter as their working hours are less.
- Income :
income of the applicant also determines the capacity of repayment. For Applicants with existing loan , capacity to pay another loan will be evaluated by analyzing the liability of the income ratio.
- Rent receivable :
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