Rental Deposit Loan
What is a Rental Deposit Loan?
A rental deposit loan is a sum obtained from a financial institution to cover the cost of a security deposit for rented housing. The loan amount might range from Rs 1 lakh to Rs 5 lakh, with an interest rate of 1.5 percent to three percent and a term of 11, 22, or 33 months depending on the rental arrangement.
Benefits of Rental Deposit Loans
Whether you are a newcomer to a new location on your first job or a seasoned professional with many jobs under your belt, moving can result in a slew of costs that drain your savings or budget. You must not only pay the new home’s security deposit, but you may also have to pay for packing and transporting your belongings from one place to another. Even if this is your first relocation and you don’t have any belongings to transport, you’ll need money to settle in and set up your new residence. There are several charges to be considered, whether it is furniture or furnishings, electrical gadgets, or culinary utensils.
Documents required for a Rental Deposit Loan
- Identify proof
- Employment proof
- Three-month salary slips
- Mail confirmation from the official mail ID
- Six-month bank statement
- Rental agreement
How does the Scheme Work?
The loan amount sanctioned is between Rs 1 lakh to Rs 5 lakh. An individual working for a public limited/private company or in a government job with a monthly take home salary of more than Rs 15,000 is eligible for this loan. The tenure of this loan is 6-33 months it should match the duration of the rental agreement. The interest rate charged per month is 0.85 percent.
Eligibility Criteria for a Rental Deposit Loan
Lending institutions have different qualifying conditions. The following are some of the factors that qualify someone for a rental deposit loan:
- Should be above 18 years.
- Should have a valid Bank Account, Aadhaar Card and a PAN card
- Rental deposit loan is only eligible for professionals working for a private limited company or in a government job.
- Between Rs 30,000 and Rs 40,000 should be the minimum monthly remuneration. To qualify for a loan requires that the applicant earn at least Rs 30,000 per month.
- Only professionals employed by a private limited firm or the government are eligible for the rental deposit loan.
Most frequent questions and answers
You have the choice of paying solely interest for the duration of the loan (as with an Overdraft Repayment Plan) or paying equal monthly payments (as under Term Repayment Plan). Your eligibility and credit checks will be used to make the final repayment plan choice. Even if you simply pay interest per month on an EMI-free loan, you must make bullet payments to the principle on a regular basis. A set monthly EMI is required for a personal loan.
The Rental Deposit Loan is deposited into the Landlord’s account directly. The renter, who is also the loan applicant, is responsible for repayment.
When you take out a loan like this, you don’t stop saving; instead, you alter your monthly cash output to accommodate additional expenses. As a result, the majority of the money is preserved for future use. Apart from that, there are several other costs associated with integrating into a new environment when you relocate. Also, by taking out a Rental Deposit Loan, you may get a bigger apartment or one in a better location – in other words, you can choose the property of your dreams without being limited by finances.