Many people own commercial spaces and offer them on lease. Leasing such spaces has its own share of advantages, one of them, is being able to raise a Term Loan against the rental income received. Lease Rental Discounting (LRD) is a Term Loan offered against income-producing commercial assets/property. The LRD Loan works on the premise that your leased property derives fixed rent, which you can use as a ‘Collateral’ to generate funds, instantly.

Now, get a Lease Rental Discounting Loan from ICICI Bank at attractive interest rates from 8.75% p.a.The LRD Loan is offered on the discounted value of future rentals, as well as taking into consideration, the underlying value of the property. Borrowers can use the loan amount for personal use or invest it for business expansion.

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Resident or Non-Resident
Any Resident or Non-Resident Individual can apply for the LRD Loan

Salaried and Self-Employed
Both salaried and self-employed professionals (including doctors, engineers, dentists, architects, chartered accountants, cost accountants, company secretary and management consultants) can apply

Loan Amount
The minimum loan amount can be Rs 10 lakh, and the maximum can be Rs 5 crore

Maximum Tenure
You can avail of the Lease Rental Discounting Loan, for a maximum tenure of 15 years

Minimum Lease Period
The minimum lease period should be 3 years

Funding will be given only against commercial or specialised properties

Escrow Account
An Escrow Account should be opened with ICICI Bank, to enable the credit of rentals against the loan sanctioned.

Proof of Identity and Residence

  • Aadhaar Card, PAN Card, Passport, Driving Licence. PAN Card issued in India is no longer considered a valid proof of identity.

Proof of Income

  • Last 3 years’ Income Tax Returns and Balance Sheet documents, duly audited/certified by a Chartered Accountant
  • Last 6 months’ Bank Account Statements, having rental credit
  • Last 6 months’ Bank Account Statements, for all other operating bank accounts.


  • Lease Agreement papers
  • Duly signed Application Form
  • Photographs.
Lease Rental Discounting Interest Rates

Note:Priority Sector Lending (PSL) & Non Priority Sector Lending (Non PSL)

Repo Rate (RR) is 4.00% as on April 7, 2021.

Lease Rental Discounting Fees & Charges
Loan type Lease Rental Dscounting
Loan Processing Charges / Renewal Charges 2.00 % + AT*
Administrative Charges Rs. 5000 + AT* or 0.25% * Loan Amount + AT (whichever is lower)
Prepayment Charges 4.00 % + AT*

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Popular FAQs

What is an LRD?

Lease Rental Discounting is categorised as a Term Loan that allows you to secure a loan using rental receipts as collateral. Tenants can easily apply for a loan against the rental income received from lease contracts. If you own a property and there is a prospect of fixed rentals for the long term, you can be eligible for the Lease Rental Discounting or LRD Loan.

What is the eligibility criteria for an LRD?

If you want to apply for the Term Loan, you need to meet the following Lease Rental

Discounting Eligibility criteria:

  • Any Resident Indian or NRI can apply for the loan
  • Any salaried individual working in the Public or Private Sector, can apply for the Lease Rental Discounting
  • Any self-employed professionals, including doctors, lawyers, chartered accountants, consultants, architects, can also apply
  • Self-employed non-professionals like traders, manufacturers, distributors
  • Any Public or Private Limited Companies, Partnership Firms, or Proprietorship firms, can apply for the LRD Loan.
What are the charges for an LRD?

Following are the Lease Rental Discounting fees and charges, to avail of the loan:

  • If you avail an LRD Loan, you are required to pay a Loan Processing Fee of 2% plus applicable taxes 
  • Administration charges will be Rs 5,000 or 0.25% of the Loan Amount plus Applicable Taxes, whichever is lower
  • If you are pre-paying the loan amount any time after 6 months, from the date of the disbursement of the loan, you will have to pay pre-payment charges at the rate of 4% plus applicable taxes. 
What is LRD‘s interest rates?

The Lease Rental Discounting Interest Rate from 8.75% p.a. The rate of interest varies, depending on the type of property, loan amount, rental income, lessee profile, etc.

Can I avail of this loan against the rent from a residential property?

No. The Lease Rental Discounting or LRD Loan is applicable only for commercial properties or specialised properties, such as warehouses, industries, schools, hotels, hospitals, banquet properties, marriage gardens, etc. If you yield rental income from any of these properties, you can avail an LRD Loan.

What is the tenure which can be offered for an LRD Loan?

The maximum loan term for the Lease Rental Discounting is 15 years. For specialised properties, the Lease Rental Discounting loan tenure is 10 years.

What is the maximum amount of Overdraft, which can be funded?

The maximum loan Overdraft facility one can avail of, is Rs 5 crores. However, the interest will be applicable only on the amount utilised. The OD facility cannot be used for speculative or restrictive purposes.

What type of documents pertaining to the lease, do I need to submit?

To apply for the loan, you need to submit the Lease Rental Discounting documents that are as follows:

  • Proof of ID – PAN Card, Aadhaar Card, Passport, Driving License
  • Proof of Income – Last 3 years’ ITR and Balance Sheet Account Statements, last 3 years’ Profit and Loss Account Statements, last 6 months’ Current Account Statements having rental credits, last 6 months bank statements of all other operating accounts
  • Proof of Property – Copy of the Leased Agreement.

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