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Aditya Birla Housing Finance Limited
ABC Solutions
About the Loan
About ABHFL Lease Rental Discounting
ABHFL Lease Rental Discounting (LRD) is a tailored financial solution that helps property owners discover the value of their rental income. By leveraging future rental cash flows, you can access liquidity without selling your property, making it an ideal funding option for business expansion, property investment, and other financial needs.
Used for:
- Business expansion and working capital needs
- Purchasing or constructing new properties
- Renovation and improvement of existing commercial spaces
- Balance transfer of existing LRD loans from other financial institutions
Why Choose ABHFL Lease Rental Discounting?
Key Benefits:
- High Loan Eligibility: Get up to 90% of rental income as a loan for financial flexibility.
- Flexible Loan Tenure: Repayment tenure of up to 15 years to suit your financial plans.
- Competitive Interest Rates: Attractive ROI based on credit profile and rental cash flow.
- Quick Loan Disbursal: Fast processing with minimal paperwork for easy funding.
- Balance Transfer Facility: Transfer your existing LRD loan to ABHFL for better terms and additional top-up funds.
Additional Advantages:
- Minimal Documentation: Simple and efficient process requiring only essential documents.
- Transparent Processing: No hidden charges, ensuring a seamless borrowing experience.
- Dedicated Relationship Manager: Expert guidance throughout the loan application and approval process.
General Lease Rental Discounting (LRD) Questions
Lease Rental Discounting (LRD) is a loan facility where property owners can secure funding by pledging their future rental income as collateral. Lenders assess the rental cash flow from a commercial, industrial, or warehouse property and provide a loan based on the Net Present Value (NPV) of future rental earnings.
LRD is available to:
- Individual property owners receiving rental income.
- Businesses & corporate entities owning leased commercial properties.
- Real estate investors with properties rented to stable tenants.
A registered lease agreement, consistent rental income, and a good CIBIL score (700+) enhance eligibility.
- Discovers liquidity without selling the property.
- Higher loan amounts – Up to 90% of net rental income.
- Flexible repayment tenure – Up to 15 years.
- Competitive interest rates based on credit profile.
- Balance transfer facility for better loan terms.
The loan amount is based on:
- The rental income from the leased property.
- The tenant profile (corporate tenants preferred).
- The lease tenure and agreement terms.
- The market value of the property.
- The applicant’s financial stability and CIBIL score.
LRD loans are available to:
- Individual property owners earning rental income
- Businesses & corporate entities leasing out commercial properties
- Real estate investors with long-term rental agreements
Applicants must have a registered lease agreement, stable rental income, and a CIBIL score of 700+ for better loan terms.
The loan amount depends on:
- Rental income stability – Up to 90% of net rental income can be considered
- Property type – Commercial, industrial, and warehouse properties qualify
- Tenant profile – Corporate tenants enhance loan eligibility
- Lease tenure – Longer leases result in higher loan amounts
The repayment tenure for an LRD loan can be up to 15 years, depending on the rental cash flow, property valuation, and borrower’s financial profile.
Lenders prefer properties with long-term lease agreements (at least 3+ years remaining). If the lease is expiring soon, you may need to renew the agreement with your tenant before applying for LRD.
Interest rates for LRD loans vary based on:
- Loan amount & tenure
- Rental income stability
- Tenant profile (corporate tenants may get better rates)
- Credit score (CIBIL 700+ preferred)
Typically, rates start from 9.50% per annum*, but actual rates depend on the lender’s assessment.
Your Equated Monthly Installment (EMI) depends on:
- Loan amount sanctioned
- Interest rate applied
- Loan tenure (up to 15 years)
Use our EMI Calculator to estimate your monthly repayment.
Yes, most lenders allow prepayment and foreclosure options. However, some may charge a prepayment penalty. Always check the lender’s terms and conditions before making early repayments.
Missing an EMI payment may result in:
- Late payment penalties
- Impact on your credit score (CIBIL score drop)
- Legal action if multiple EMIs are missed
It is advisable to set up an auto-debit facility for timely payments.
Yes, balance transfer facilities allow you to shift your LRD loan to another lender for:
- Lower interest rates
- Additional top-up loan options
- Better repayment terms
The step-by-step process includes:
- Check Eligibility – Ensure stable rental income and a CIBIL score of 700+
- Submit Application – Fill in details online or visit a branch
- Document Verification – Provide KYC, income proof, and property documents
- Property Evaluation – The lender assesses property value and rental agreement
- Loan Sanction & Disbursement – Upon approval, funds are disbursed as per the agreed terms
- KYC Documents – PAN, Aadhaar, Passport, Driving License
- Income Proof – ITR (last 3 years), Balance Sheets, Bank Statements (last 6 months)
- Property Documents – Registered Lease Agreement, Title Deed, Encumbrance Certificate
- Guarantor Documents (if applicable) – ID proof, income proof, and bank statements
The typical processing time is 5 to 10 working days, subject to:
- Timely submission of all required documents
- Smooth property verification and valuation
- Tenant profile and lease agreement validation
Yes, balance transfer facilities allow you to move your LRD loan to another lender for:
- Lower interest rates and reduced EMI burden
- Extended loan tenure for better financial flexibility
- Top-up loan options for additional funding
A top-up loan is an additional loan on your existing LRD facility. You can apply if:
- Your property has higher rental income eligibility than your current loan
- You have a good repayment track record
- The remaining lease tenure is long enough to support additional financing
- Cost Savings – Lower interest rates mean reduced EMI payments
- Higher Loan Amount – Potential to increase loan value with better terms
- Improved Cash Flow – Extended tenure options for easier repayment
Missing an EMI payment may lead to:
- Late payment penalties as per the lender’s policy
- Impact on your CIBIL score, making future loan approvals difficult
- Legal action if multiple payments are missed
To avoid this, set up an auto-debit or standing instruction for timely payments.
If multiple EMIs are missed (typically 3 consecutive defaults), the lender may:
- Issue a loan recall notice
- Initiate legal proceedings to recover dues
- Invoke collateral rights, which may include property repossession
Yes, since the leased property acts as collateral, the lender has the right to:
- Take legal possession of the property
- Recover outstanding dues through asset sale
- Reassign rental rights to cover loan payments
If facing financial difficulties, consider:
- Loan restructuring – Request extended tenure to reduce EMIs
- Top-up loan facility – Access additional funds for managing cash flow
- Balance transfer – Shift to a lender offering lower interest rates
Yes, most lenders prefer restructuring over foreclosure. You can:
- Discuss a revised repayment schedule
- Request temporary EMI reduction or a moratorium period
- Explore settlement options if repayment becomes unmanageable
Once the loan is approved, the disbursement process includes:
- Signing of the loan agreement and completing documentation
- Verification of property ownership and rental agreement
- Fund transfer to the borrower's account as per the sanctioned loan amount
The disbursement is typically done in a lump sum, based on the rental income and loan eligibility.
LRD is available for:
Commercial properties (office spaces, retail stores, malls)
Industrial properties (factories, production units)
Warehouses & logistics parks
The property must have a valid lease agreement with a stable tenant for a specified tenure.
Lenders assess:
- Ownership status – The property must have a clear title and be legally owned
- Rental income consistency – A long-term, registered lease agreement is required
- Tenant profile – Corporate tenants are preferred for better loan terms
- Property valuation – The market value should justify the loan amount requested
Lease Rental Discounting: Eligibility Criteria
Ensuring you meet the eligibility criteria helps in a smoother loan application process.
General Criteria:
- Nationality: Indian citizens
- Age: Minimum 25 years at loan origination, maximum 70 years at loan maturity
- Credit Score: 700+ preferred for better interest rates and higher loan eligibility
- Rental Income Consideration: Up to 90% of net rental income
- Eligible Properties: Commercial, industrial, and warehouse properties with valid lease agreements
Note: Meeting these criteria does not guarantee loan approval. Final eligibility is determined based on credit history, rental income stability, and property evaluation.
Step-by-Step Guide: How to Apply for a Lease Rental Discounting?
Applying for Lease Rental Discounting (LRD) with ABHFL is a seamless and efficient process:
1. Check Eligibility:
- Use our online eligibility calculator to determine the loan amount you qualify for.
- Ensure your CIBIL score is 700+ for better loan terms.
2. Prepare Documentation:
- Identity proof, address proof, and PAN card
- Income proof (latest ITR, bank statements, and financial records)
- Lease agreement with tenant details and rental receipts
- Property ownership documents
3. Application Submission:
- Fill out the online application form with accurate financial and property details.
- Submit the required documents for initial verification.
4. Document Verification & Property Assessment:
- Our team reviews your documents and may request additional details if necessary.
- A property evaluation is conducted to assess the market value and rental potential.
5. Loan Offer & Acceptance:
- Receive a loan sanction letter with details on the loan amount, tenure, and interest rate.
- Review and accept the offer to proceed with disbursement.
6. Loan Disbursement:
- Upon final approval, the loan amount is disbursed as per agreed terms.
Estimated Timeline: The entire process typically takes 5 to 10 working days, subject to prompt document submission and satisfactory property evaluation.
Documents Required for Lease Rental Discounting
Having the right documents ready ensures a smooth and easy loan approval process.
Personal Documents:
- ID Proof – PAN & Aadhaar Card, Passport, Driving License, etc.
- Address Proof – Utility Bills (not older than 3 months), Passport, Aadhaar, Rent Agreement
- Passport-size Photographs
Financial Documents:
- Income Tax Returns (ITR) for the previous three years
- Balance Sheet & Profit/Loss Account Statements for the last three years
- Current Account Statements with rental credits
- Bank statements for the past six months for all active accounts
Property & Lease Documents:
- Registered Lease Agreement with tenant details
- Rental receipts and proof of continuous rental income
- Title Deed & Property Ownership Documents
- Encumbrance Certificate (EC)
- No Objection Certificate (NOC) from builder/society (if required)
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Product Leaflet
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Fees and Other Charges
Transactions & Charges
0.25% onwards of the loan amount plus applicable GST, may vary depending upon the risk profile of the customer.
1. Floating rate term loans sanctioned to individual borrowers, with or without co-borrowers(s):
- Other than business purpose – NIL.
- Loan for business purpose up to 50 lakhs* – NIL.
- Loan for business purpose above 50 lakhs* – 4 % of principal outstanding.
2. Floating rate term loan sanctioned to Micro and Small Enterprises (MSEs) borrowers, with or without co-borrowers(s):
- Other than business purpose* – NIL.
- Loan for business purpose up to 50 lakhs*- NIL.
- Loan for business purpose above 50 lakhs* – 4 % of principal outstanding.
3. Floating rate term loan sanctioned to non-individual borrowers other than MSE borrowers:
- Housing Loan – NIL
Non-housing Loan - 4% of principal outstanding
4. Fixed interest rate housing loan given to Individual/ Non-individual borrowers:
- Closure from own sources – Nil
Closure from other sources – 2% of principal outstanding
5. Fixed interest rate non-housing loans (LAP/LRD/CP/GPL/Top-up) given to Individual/Non-Individual borrowers (closed from own/other source): 4% of principal outstanding
Explanation:
1. In case of Semi-Fixed Loans (fixed for initial period and then floating), the Foreclosure/ Part payment norms will be applicable as per the status (fixed/floating) of the loans as on that particular day.
2. “Own sources” means any source other than by borrowing from a bank/ HFC/ NBFC and/or a financial institution.
3. “Fixed rate loan” means a loan where the Rate of Interest is fixed either for a particular period or for entire duration of the loan.
4. “Business purpose loan” shall mean:
- Loan against any property/ Top up loans availed for Business use such as working capital, business debt consolidation, repayment of business loans, expansion of business, acquisition of business asset,
- Loan for purchase/ renovation/ construction/ extension of Non-residential property,
- Lease Rental Discounting.
5. “Micro and Small Enterprises (MSEs) borrowers” shall have the same meaning as defined in Micro, Small and Medium Enterprises Development (MSMED) Act, 2006
* Applicable for all Loans sanctioned or renewed on or after January 01, 2026.
| Penal Charges: | |
|---|---|
| Late Payment Penalty | 12% p.a. above current applicable interest rate (aggregate not exceeding 24% p.a. plus GST as per applicable laws) |
| Non- submission of Critical Post Disbursement Documents like Title document / Security perfection documents / Mortgage Deed / charge creation with MCA (wherever applicable) or non-adherence to any terms and conditions, representations and covenants as defined in the loan agreement / sanction letter within the targeted date of submission. | Rs. 3000/- per month |
| Cheque bouncing charges/NACH failure charges/Bounce charges | Rs 750/- per instance |
| Non-submission of revised NACH / ECS Debit Mandate registration wherever existing mandate is invalid / inactive / bank account closed or frozen / other technical issue for a period of 30 days | Rs. 1000/- per month in case of secured loans |
Rs 750/- per instance per loan account
As applicable based on actual delayed status or as communicated by the lender from time to time
CERSAI charges (You may visit the website of CERSAI for all such charges at www.cersai.org.in)
When facility amount is equal to ₹.5 lacs or lesser – ₹.50 per propertyWhen facility amount is greater than ₹5 lacs – ₹100 per property
₹1,000/- per instance
₹750/- per instance
₹200/- per instance
₹750/- per instance
₹50/- per instance for Consumer and ₹500/- for Commercial CIBIL
0.5% of principal outstanding plus applicable GST
0.25% + GST on principal outstanding, capped at 7500 /- per instance
Rs 500/- per instance
2% of principal outstanding plus applicable GST
As per actual, where applicable
