Axis Bank - Lease Rental Discounting

Axis Bank – Lease Rental Discounting

Axis Bank – Lease Rental Discounting

Axis bank offers a lease rental discounting (LRD) scheme, which provides term loan for the property owner against the rental receipts obtained from the lease contracts with corporate tenants. The bank will examine long-term cash-flow and provide the loan based on the rental amount. In this article, we look at the lease rental discounting in detail.

Eligibility Criteria

The eligibility criteria for availing loans from the Axis bank are as follows:

Salaried individuals

  • The applicant should be an employee of a company or public sector undertaking, which includes central, state and local bodies.
  • The applicant must be above 24 years of age at the time of applying for the loan.

Self-employed individuals

  • Any person filing Income Tax returns can apply for lease rental discounting (LRD) scheme.
  • The applicant should be within the age group between 25 to 65 years at the time of applying for the loan.

Self-employed Professionals

  •  Any professionals such as doctors, engineers, dentists, architects, chartered accountants, cost accountants, company secretary and management consultants are eligible for lease rental discounting (LRD) scheme.
  •  The applicant should be within the age group between 25 to 65 years at the time of applying for the loan.

Lease Rental Discounting (LRD)

All resident individuals can obtain a term loan but, the lessee must be a company registered under the Companies Act, 1956.

Quantum of Loan

The minimum and the maximum loan amount provided under lease rental discounting is specified here:

Minimum Loan: The minimum amount of loan is Rs. 5 Lakhs.
Maximum Loan: The maximum loan amount is Rs. 5 crores

Loan value will be decided based upon the value of the property.

Fees

Following are the fees and charges applicable for lease rental discounting:

ParticularsCharges
Loan Processing ChargesUpfront processing fee of Rs.5000 + applicable GST will be collected at the time of application submission.
Pre- Prepayment/Foreclosure Charges

For Non-individual borrowers, 3% will be charged.

For individual borrowers, pre-payment or foreclosure will not be applicable.

No Due CertificateNot applicable
Duplicate No Dues Certificate/NOCRs. 500 per instance
Solvency CertificateNot applicable
Penal Interest The penal interest rate of 24% per annum, i.e. 2% per month will be charged on the overdue instalments
Stamp Duty and other statutory chargesAs per applicable laws of the state
Cheque Bounce ChargesRs. 500 per instance
Cheque Swapping chargesRs. 500 per instance
Duplicate statement issuance chargesRs. 250 per instance
Issuance Charges for Photocopy of Title DeedsRs. 250 per instance
Credit Report Issuance ChargesRs. 50
Switching Fees (Higher Floating Rate to Lower Floating Rate)0.5% on outstanding principal balance with a minimum of Rs. 10,000.

Note: The Goods and Services Tax (GST) will be imposed as per the applicable rates.

Rate of Interest

The interest rates for Axis bank loan against rental receipts are explained in detail below:

Amount of LoanMinimum Rate of InterestMaximum Rate of Interest
Less than Rs.75 lakhs8.50%11.75%
From Rs.75 lakhs to Rs.1 crore.8.55%11.50%
Above Rs. 1 crore8.56%10.50%

Documents Required

The following documents are to be submitted:

  • Proof of Identity: Passport/PAN Card/Aadhaar Card/Driving License/Voter ID/Govt Employee ID/Government issued Photo ID.
  • Proof of Address: Aadhaar Card/Driving License/Voter ID/Government issued Photo ID/Govt Employee ID/Electricity Bill/Gas Bill/Telephone Bill/Property Tax Receipt.
  • Proof of Age: Passport/PAN Card/Aadhaar Card with DOB/Driving License/Birth Certificate/SSC Marksheet.
  • Signature Proof: Passport/PAN Card/Banker’s verification/Notarized affidavit with ID and Address proof.

Proof of Income

For the salaried individual, any one of the following has to be enclosed.

    •  Copy of last three months pay slip
    • Copy of last six months pay slip/2 years bonus proof (in case of variable pay)
    • Copy of last six months bank statement showing salary credits
    • Copy of last two years Form-16 or employment continuity proof.

 For NRI Salaried

      • Copy of last three months pay slip
      • Appointment letter/contract letter
      • Continuous Discharge Certificate for Shipping cases
      • Copy of last six months Domestic NRE/NRO account statement
      • Copy of last six months international salary account statement
      • Overseas credit report
      • Valid visa copy/OCI card
      • Passport copy
      • POA details

For Self employed

    • Copy of last two years ITR, Computation of Income, P&L, Balance sheet with CA seal and sign is required.
    •  For Asha HL –  ITR statement for one year, Computation of Income, P&L, Balance sheet with CA seal and sign is needed.
    •  Tax Audit Report if turnover exceeds Rs.1 Crore or Gross Receipts exceeds Rs.25 Lakh.
    • Copy of last six months bank statements of individual and business accounts
    • If ITR is filed without digital sign – CPC and tax paid challan copy.
    •  Business continuity proof (three years for HL / five years for LAP)

Other proofs

    • Copy of last six months bank statement where rent is credited
    • Registered valid lease agreements
    • Copy of last two years ITR, Computation of Income, P&L, Balance sheet with CA seal and sign
    • Copy of last one year 26 AS
    • If Partnership firm – Partnership deed, two years audited financials, operative account, KYC, partnership authority letter
    • Duly filled and signed application form has to be submitted.
    • Latest passport size photo
    • Aadhar card is necessary for Credit Linked Subsidy Scheme (PMAY) applicants
    • PAN card is needed for all financial applicants
    • Processing Fee and CERSAI cheques
    • Self-attestation of borrowers on all documents submitted.

Application Procedure

The eligible applicant who wants to apply for the Lease Rental Discounting loan has to approach the nearest Axis bank branch and collect the application form from the bank. Complete the application with the mandatory details, attach the required documents and submit to the bank.

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