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ICICI Bank Lease Rental Discounting (LRD)

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ICICI Bank Lease Rental Discounting (LRD)

LRD Loan Meaning

LRD i.e. Lease Rental Discounting is a term loan offered against the rental income received from the leased out properties that generate regular fixed income when leased to a reputed company/establishment.

Lease Rental Discounting ICICI Bank

ICICI Bank provides the LRD loans in the form of EMI-based term loans as well as overdraft loans against the rental income received from a leased-out commercial property at attractive interest rates starting from 8.35% p.a. onwards for salaried, self-employed, professionals, and NRIs to fulfill their personal needs as well as to invest it for business expansions.

Details of LRD Loans ICICI Bank

Given below are the lease rental discounting eligibility criteria for LRD loans in ICICI Bank.

=> Who can apply for ICICI Lease Rental Discounting loan?

  • All eligible borrowers can apply for lease rental discounting in ICICI Bank.
  • Resident & Non-Resident Indians.
  • Salaried working in the public sector or private sector.
  • Salaried working in the public sector or private sector.
  • Self-employed non-professionals – traders, manufacturers, & distributors.
  • Professionals- doctors, engineers, chartered accountants, architects, dentists, cost accountants, company secretaries, and management consultants.
  • Proprietorship Firm, Public Limited Company, Private Limited Company, & Partnership Firm.

=> Properties considered for LRD loans in ICICI Bank

Only let-out commercial properties or specialized properties such as warehouses, industries, hospitals, hotels, schools, banquet halls, marriage gardens, etc. that derive fixed rental income can be given as collateral for LRD ICICI Bank.

=> Type Of Loan

=> Purpose of availing an LRD loan

  • Personal Use – property renovation, children’s education, marriage expenses, funding the dream vacation, etc.
  • Business Use – business expansions, marketing, advertising, office infrastructures/stationary/machines, etc.

=> Maximum Tenure for Loan Against Property that is Leased-Out

  • Commercial Property – Up to 15 years.
  • Specialized Property – Up to 10 years.

=> Loan Amount

  • Minimum – Rs.10 Lakhs.
  • Maximum – Rs.3 Crores for term loan and Rs.5 Crores for an overdraft facility.

=> Lease Rental Discounting Interest Rates

CIBIL Scores Loan Amount
  Up to Rs.50 Lakhs Rs.50 Lakhs – Rs.1 Crore Above Rs.1 Crore
Above 750 RR + 4.85% (8.85%) RR + 4.60% (8.60%) RR + 4.35% (8.35%)
700-750 RR + 5.25% (9.25%) RR + 5% (9%) RR + 4.75% (8.75%)
Below 750 RR + 5.50% (9.50%) RR + 5.25% (9.25%) RR + 5% (9%)

Note: (i) The ICICI Bank LRD rate of Interest is subject to change without prior notice.
(ii) RR stands for Repo Rate which is 4% as of August 2021.

The LRD interest rates also vary depending on the type of property, rental income, lessee profile, PSL & non-PSL sectors, etc.

=> Lease Rental Discounting Processing Fees & Other Charges

  • Loan Processing Fees/Renewal Charges – 2% of the loan amount.
  • Administrative Charges – Rs.5000/- or 0.25% of the loan amount whichever is lower.
  • Prepayment Charges – 4% of the outstanding loan amount.
  • GST – separate 18% GST will be applicable on all fees/charges.

Also, read the list of charges in availing of a loan.

=> Documents Required For Lease Rental Discounting

KYC * Pan Card
* Adhar Card
* Photograph
Income Documents For Salaried * 4 months salary slips.
* 2 years form 16
* 6 months bank account statement.
Income Documents For Self-Employed * 2 years ITR with Computation of Income, Saral Copy, Balance Sheet, P&L Account, Capital Account – CA certified with membership no. and UDIN No.
* 12 months bank account statement.
* Business profile.
* Business proofs.
Property Papers * Prior Chain of Agreement.
* OC/CC + approved plans.
* Index 2.
* Share Certificate.
* Society Registration Copy.
* Property tax.
* Property maintenance bill.
Other Documents * Registered valid lease agreement.
* Bank account statements for the rent received.    
* Duly signed bank application form.
* Processing fee cheque.
* Any other document as required by the bank.
Additional Documents Required For LRD Loan Transfer * LOD (list of documents).
* Outstanding letter.
* 12 months repayment track record.

Click to know the NRI list of documents for applying for a mortgage loan

Prerequisites to avail of an LRD loan with ICICI Bank

  • Funding will be given only against the self-occupied, commercial, or specialized property that earns a fixed rental income per month.
  • An ESCROW account with ICICI Bank is mandatory to enable the credits of rental against the loan sanctioned.
  • The minimum lease period for the property should be 3 years.
  • The property has a clear and marketable title and is built according to the approved plans of the local government authorities.
  • The leased-out property has a valid and registered agreement between the tenants and owners.
  • The owners and the tenants are creditworthy as per the ICICI Bank standards.
  • LRD loan interest rate varies for PSL & non-PSL sectors (PSL= Priority Sector Lending).

FAQs

Q. What are the ICICI Bank’s LRD loan interest rates in 2021?

Ans: ICICI Banks’ lease rental discounting interest rates in 2021 range from 8.35% p.a. – 9.50% p.a.

Q. Can an LRD loan for lease house be provided by ICICI Bank?

Ans: ICICI Bank does not provide LRD loans against the residential property, hence a lease house loan is not possible under the LRD scheme. For a house lease loan, you can apply for a mortgage loan with ICICI Bank.

Also, read Why Is It Difficult To Get A Loan On Gram Panchayat Property?

Q. What is the minimum income required for an LRD loan?

Ans: The minimum net rental income must be Rs.20,000/- p.m.

Q. Do ICICI Bank takeover LRD loans?

Ans: You can transfer your LRD loan to ICICI Bank at the lowest interest rates starting from 8.35% p.a. onwards. ICICI Bank is the provider of the cheapest interest rates in the lease rental discounting market in India.

Also, read How to deal with increasing interest rates.

Q. Can a top-up be availed on an ICICI Bank LRD loan?

Ans: Yes, LRD loan top up ICICI Bank can be availed of at attractive interest rates.

Also, read ICICI Bank Home Loan Top Up.

Q. What is the maximum funding available for the property?

Ans: The maximum loan funding depends on net rental incomes and the current market value of the property. The lease rental discounting formula for calculating the LRD eligibility is lower of the two, i.e.

  1. 85% of the net rental income
  2. LTV – 50% of the current market value of the property.

 Subject to a maximum of Rs.3 Crores for commercial properties and Rs.5 Crores for specialized properties such as hospitals, schools & colleges, industries, warehouses, etc.

Also, read (LAP)- Loan Against Property Eligibility.

Q. What will be the EMI for an LRD loan of Rs.55 Lakhs?

Ans: Considering the LRD interest rate to be 8.60% for 15 years, the EMI for 55 Lakhs will be Rs.54,484/-. Use the ICICI Bank LRD loan calculator to know your EMIs. Alternatively, you may also use Loanfasttrack’s EMI calculator to know your exact EMIs for different loan amounts and tenures.

Also, read on Home Loan EMI Calculator.

Q. Can an LRD loan be availed for a maximum period of 20 years?

Ans: The LRD loan with ICICI Bank can be availed for a maximum period of 15 years for an EMI-based term loan and 10 years for an LRD overdraft facility loan.

Q. Can I apply for an LRD loan with a co-applicant?

Ans: Yes, a co-applicant is mandatory for applying for an LRD loan with ICICI Bank and the income of the co-applicant can also be added to enhance the loan eligibility. Read, to find out who can be your co-applicants.

Also, read 4 Important Benefits Of Applying For Joint Home Loans.

Q. How to apply for ICICI Bank LRD loans?

Ans: You can apply for ICICI Bank LRD loans online as well as offline.

Also, read Online Vs Offline Home Loan – Which One Is Better?

ICICI Bank LRD Loan Comparison With The Other Banks

Bank Name Interest Rate Tenure Maximum Loan Amount Maximum Funding Against Rent Receivables Processing Fees
ICICI Bank 8.35% p.a. – 9.50% p.a. 15 years Rs.3 Crore 85% Up to 2% of the loan amount + applicable GST.
HDFC Bank 9.70% p.a. – 10.30% p.a. 9 years Rs.5 Crores 85% Up to 1% of the loan amount + applicable GST. (Min. Rs.3,500/-)
SBI 9.45% p.a. – 11 % p.a. 10 years Rs.500 Crores 95% Up to 2.02% of the loan amount + applicable GST. (Max. Rs.1,01,865/-)
Axis Bank 10.50% p.a. -11 % p.a. 9 years Rs.5 Crores 85% Up to 1% of the loan amount or Rs.10,000/- whichever is higher + applicable GST.
Bank Of Baroda 8.65% p.a. – 11% p.a. 10 years Rs.20 Crores 55% 0.50% of the loan amount + applicable GST. (Min. Rs.1000/- & max. Rs.10 Lakhs)
Kotak Mahindra Bank 9.50% p.a. onwards 10 years Rs.5 Crores Up to 8 times of the net monthly rental received Up to 1% of the loan amount + applicable GST. 
Note: The information related to LRD interest rates, charges, tenures, & funding information mentioned in the table is subject to change without prior notice.

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Loanfasttrack

Loanfasttrack is a Mumbai-based loan provider company since 2015 offering loan services in Mumbai on– housing loan in Mumbai, mortgage loan in Mumbai, personal loan in Mumbai, unsecured business loans, home loan transfer, top-up loans, and loan transfers. Loanfasttrack is a direct sales associate with leading banks namely, ICICI Bank, HDFC Ltd, Canara Bank, Citi Bank, Piramal Housing Finance, etc.

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