Praveen Kapur is a young professional who moved to Bengaluru to start work as an IT professional.
As he worked in Electronic City, he selected a house nearby. However, while he could afford the rent, Rs 25,000 per month for the 3BHK, he was just not able to rustle up the money for the regulation three months’ security deposit.
For Kapur and thousands of youngsters like him who are part of the mobile workforce that frequently shifts from city to city according to job needs, LoanTap has an innovative rental deposit loan.
The minute a tenant finalizes the rent with the landlord, LoanTap extends rental deposit loans to make the security deposit on behalf of the tenant. The loan amount ranges from Rs 1-5 lakh, for 11 to 33 months, depending upon the lease rental agreement.
Satayam Kumar, co-founder of LoanTap, says, “The borrower has to pay only the interest till the termination of the lease, after which the landlord returns the principal amount (security deposit).”
The tenant has only to fill an online application and upload relevant documents on LoanTap’s website. The documents are verified and the loan – if approved – is disbursed within 24 hours.
All salaried professionals with a monthly salary of Rs 30,000 and above in 12 cities are eligible for the loan. Also keeping in mind the profile of the borrowers, the loans are free from any collateral.
The cities where this service is available are Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi NCR, Indore, Jaipur, Mumbai, Navi Mumbai, Pune, Raipur, and Vadodara.
The rental deposit loan amount is completely based on the security deposit mentioned in the lease agreement.
“Generally, it is seen that cities like Mumbai and Pune have much higher rental deposit amount charged by the landlord than compared to the Delhi NCR,” Kumar says.
The deal is entirely between LoanTap and its consumer. “It’s the customer’s responsibility to pay back the money,” says Kumar. “A legal agreement is signed by the customer that he is bound to pay back the loan amount. For security purpose, we collect post-dated cheques from the customer.”
The tenant simply must pay the monthly interest till the end of the lease or when the tenant decides to vacate the house. That is when the landlord repays the entire amount, which can be used to close the loan. “Thus, this loan is very convenient for tenants,” Kumar says.