Loan Against Leased Property: Meaning, Process, and Benefits

Looking to unlock the value of your rental property? A loan against leased property, commonly known as Lease Rental Discounting (LRD), could be a feasible solution. It allows commercial property owners to secure funds based on the rental income earned from a leased commercial or industrial property.  

If you are wondering how to get a loan on a leased property and what makes you eligible, this guide will walk you through everything—from meaning to benefits. 

 What is a Loan Against Leased Property?  

A loan against leased property is a form of mortgage loan offered against rental income from a leased property. This loan is generally provided to property owners who have leased their commercial or industrial premises to tenants. Bajaj Housing Finance offers loans against leased property starting from Rs.5 Crore*, based on applicants’ rental profile and financial standing. 

 Types of Loans Against Leased Property 

Before applying, it is essential to understand the kind of properties that qualify: 

• Commercial LRD: For income from leased office spaces, retail outlets, or commercial complexes 
• Industrial LRD: Based on rentals from warehouses or manufacturing units 

 Key Advantages of a Loan Against Leased Property 

• High Loan Amounts 
• You can secure substantial funds of Rs.5 Crore* or more based on your eligibility and rental income.  
• Extended Repayment Tenure 
• With loan tenures extending up to 13 years, you can repay the loan comfortably alongside other financial commitments. 
• Quick Disbursal Timeline 
• Approved borrowers can expect funds to be credited within 7 to 10 days of approval, helping them proceed with their financial plans quickly and without unnecessary delays. 

 Eligibility Criteria for a Loan Against Leased Property  

To qualify for a loan against leased property: 

• The applicant must be a resident citizen of India.  
• At the time of loan sanction, the applicant should be at least 25 years** of age. 
• The property to be pledged must be a leased commercial or industrial premises, such as an office space, retail outlet, or warehouse. 
• The applicant must demonstrate consistent rental income from existing tenants. 
• The net rental inflows should support the repayment structure, with up to 90% of the discounted value considered for future EMI payments. 

 Documents Required for a Loan Against Leased Property 

You need to submit the following documents*** to apply for a loan against leased property: 

• Recent passport-sized photograph of the partner or director 
• Mandatory documents such as PAN Card or Form 60 
• Voter ID, Driving Licence, Aadhaar Card, PAN Card 
• Signature verification document 
• Certificate of Incorporation (for companies) 
• Income Tax returns, profit and loss account, and audited balance sheet for the past two years 
• Bank account statements from the last six months 
• Partnership deed (for partnership firms) 
• Memorandum and Articles of Association (MOA/AOA) 
• Registered lease deed or leave and licence agreement 

***This is an indicative list of documents. We may request additional documents at the time of processing.