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14 - Lease Rental Discounting

Credit Norms: Based on Rental Income for Salaried / SEP / SENP
Illustration: Mr.Harjinder Singh owns a commercial premises leased out to a private sector
bank for a tenure of 10 years. He wants loan against lease rental of the property at the
prevailing ROI of 9% p.a.
Norms Validation % Particulars Validation Amount
Lease Rental As per Lease Lease Rental Lease Agreement 7,36,000
Agreement
Max. EMI As a percentage 90% Max. EMI possible 90% of 7,36,000 6,62,400
possible of Rent as Lease Ag.
Prop. Value Val. Report 6,75,00,000

Max. LTV. % of M.Vaue 65% Max. Loan (65% x 675,00,000) 4,38,75,000

Loan Eligibility
1267 (
Max. Loan based Max. EMI Option A: ( 6,62,400 x 1,00,000 5,22,80,979
on Rent Income EMI per lakh Loan Amount
Max. Loan based on 65% of Option B:
Prop. Value & LTV Market Value (65% x 675,00,000) 4,38,75,000
norms Loan Amount
Final Loan Lower of the two Final Loan Amt. Lower of A & B 4,38,75,000
Amount Options A & B

* EMI per lakh for tenure of 10 years @ 9% p.a. is Rs.1267
* Other Basic Norms
Max. Tenure - 11 years or borrower age norms. Min. Primary Lease Period- 60 months.
Min. Residual Tenure in Primary Lease Period Acceptable Property - Commercial with rental.
11 months.
Acceptable Lessee - MNCs, Banks, Insurance, Escrow of Rental Income mandated by PCHF.
MF, Corp. Off, Retail Formats.
Repayment from Escrow Account. Documentation: Loan Ag., Escrow Ag. MOE, Tenant NOC.

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