As is the case with most expatriates, NRIs want to remain
connected with their homeland. The best way to do it is by buying a home in
India. Banks have understood this and the result is a plethora of schemes for
NRIs for buying property in India. Most banks define the age criteria for home
loans available for NRIs. The age of the applicant should be between 21 and 60.
The way banks define residential status may differ, but usually, if you are
abroad for a year or more, you are eligible for an NRI home loan. This is for
salaried employees. If you are doing business, the requirement changes to 3
years. The tenure usually is less than the tenure offered to Indian citizens.
So, if the typical tenure for Indian citizens is 20 years,
it may be just 10 years or 15 years for NRIs. Just as in the case of home loan
by resident Indians, banks also put minimum criteria on income of individuals
applying for loan. An income above USD 40,000 should usually suffice but this varies
as per the individual bank's policy. As far as documentation is concerned, the
borrower has to submit (apart from all the documents required for resident
Indians) visa copies, passport copies, and foreign residential proof. Home
improvement loan Home improvement loan is a scheme by which banks provide loan
for repair, improvement, or renovation of home.
NRIs are also eligible for this type of loan. The criteria
for home improvement loan are similar to other loan schemes (income,
residential proof, loan to income ratio etc.). The only difference is that the
amount may be capped by some banks. For example, a bank may cap the amount to
Rs 3 lakh as per its policy. The security in this case will be the
hypothecation of the assets created by the renovation of home. For example, if
the kitchen in remodeled with the loan, its assets will be hypothecated by the
bank till the loan is paid.
Vehicle loan NRIs can avail vehicle loan too from Indian
banks, though the criteria widely differ. For example, some banks may allow
NRIs to take vehicle loans but need a resident Indian as guarantor for the
loan, while some banks may allow NRIs to become guarantor and avail the loan in
the name of a resident Indian. In the second case, even though the NRI is
included as a guarantor, he or she will pay the EMI. Remember that this is not
the case in normal loan where a guarantor is the last resort for the banks for
recovery, while the applicant has to pay the EMI.
In this case too, NRIs have to furnish required
documentation like address proof, income certificates, passport details, visa
details, and details of Indian guarantor. The tenure of loan can vary as per
the policy and can be anywhere between 3 to 7 years. The loan amount depends on
the income and value of the car. Usually the LTV (loan to value) ratio is 80%
to 100%. The loan to value ratio is the proportion of price of the car that can
be availed through loan scheme.
Points to remember In all cases, since the loan is given to
NRIs, it is expected that the repayment will be done through normal banking
channels using remittances from outside India. This can also be done by using
NRE/NRO (Non-resident external, Non-resident ordinary) accounts.
In a few cases, banks may allow close Indian relatives to
pay the EMI but these cases are dealt at individual level. This can be
ascertained at the designated branch of your bank. Secondly, check the
processing and other administrative fees associated with Housing
Loan for Nri. These extra costs vary with banks and they can increase the
real cost of loan. Compare with various banks, look at the overall cost and
then decide. Additionally, do take care of the difference in interest rates in
India and your new home country.
Usually, rates in India are much higher. You
would be better off taking a loan abroad and buying the car in India with 100%
down payment using your NRO/NRE account. Finally, know the rules. Even though
Governments have made transactions quite easier compared to what they were a
few years back, it is always prudent to confirm the nuances with banks before
you opt for loan.
[Source: http://www.moneycontrol.com/news/nris/loans-non-resident-indians-can-takeindia_1349515.html]
