Rental Deposit Loan: These days, in search of better career opportunities, working professionals are moving to bigger metro cities from Tier-2 cities. This originates the need for a rental home wherein they can shift quickly. However, there are two types of tenants; one who look for a house nearby their office space and another who look for a home at a far place to save rent as well as high-security deposits.
A security deposit is an amount that a tenant has to pay before entering into the rented apartment or flat. In some cities like Delhi, a landlord asks to deposit a 2-3 month rent amount prior, but in cities like Bengaluru and Mumbai, it ranges from 11-22 months. Sometimes, such high rental deposit tenants refrain from opting for a modest and well-developed home. Here comes the role of a rental deposit loan, which helps in renting your dream house in one go.
What is Rental Deposit Loan?
A rent deposit loan is a type of loan that helps in solving financial worry for the security deposit of rented properties. It is a new term in the loan world, and hence it is not offered by banks. On the other hand, many online lending sites offer house rent loans quickly as the amount is much less and the process is much faster. As the security deposit of the rented properties varies from city to city, so as the loans for the deposit on rented house.
The online lenders provide credit to the tenants very quickly for 11, 22, and 33 months of tenure. The house rent loan borrower has to pay the interest until they take the loan or lease agreement. The amount of home loan for the rental house may vary from Rs 1 lakh to up to Rs 5 lakh at an interest rate of 1.5 % to three %, and the tenure of the loan would differ as per the rental agreement such as 11, 22 and 33 months.
For example, if you borrow Rs 2 lakh at 1.5 % interest for 11 months, the monthly interest will be Rs 3,000, and the total stake for 11 months will be Rs 33,000. Once the agreement is over, the landlord payback the deposit amount to the lender or the tenant. For this, a declaration is also taken by the landlord.
How does Rental Deposit Loan help?
If you a relocating to a city like Mumbai or Bangalore, where the quantum of the security deposit is too high, a rental deposit is of much help. It helps save your extra money and finalize a rental property of your choice. As the interest rate is low, one can quickly pay the EMIs without pressuring their financial planning. You can also easily manage your expense, which may be relatively high due to shifting.
How to apply for Rental Deposit Loan?
The Rental Deposit Loan application procedure is not as hectic as other loan applications. These days many online lending portals are available globally, which provides hassle-free Rental Deposit Loan.
All you need to do is submit all the relevant documents online, further verified by the loan provider company. In the next 24 hours, the loan amount gets disbursed into the borrower’s account if all the provided information matches the company’s requirement.
A home loan or rented house?
- Owning a home can generate additional income in rentals or from paying guests.
- Rentals seem cheaper than the EMI in the short run, but in the long-run cost of living in a rental property for one’s entire life would be much more expensive than living in one’s own home.
- The home’s capital value also increases over time, whereas there is no benefit in a rented house.
- However, if one is sure about the city and has the required funds for the down payment and cash flow is stable in the future, it is suggested to own a home.