Although, there are some loans available to Non Resident Indians
(NRIs) but their terms and conditions are different than the ones
for loans availed by any Indian Resident.
Outlined below are some points that can shed the considerable
light on important facets related to NRI home loans.
Who is an NRI?
NRI is a term refers to an Indian citizen who holds a valid Indian
passport and stays abroad for employment or for carrying on business
outside India or stays abroad under circumstances indicating an
intention for an uncertain duration of stay.
Eligibility Criteria
To avail the home loan, the NRI must hold a bachelor’s degree.
This is not a condition for any Indian residents. The NRI must
be earning a monthly income of USD 2,000. Not all the housing
finance companies (HFCs) follow the same criterion to issue home
loans to NRIs.
Limit of NRI Home Loan
There is a limit to amount of NRI home loans. It should not exceed
85 per cent of the cost of property whereas it is 90 per cent
for Indian residents. The size of the home loan largely depends
on the borrower’s repayment capacity. As such, there is
a maximum limit. The upper limit of NRI home loans with HDFC Bank
can go up to Rs 1 crore (Rs 10 million), while SBI offers a maximum
home loan of up to 24 times the borrower’s net monthly income.
Mode of Repayment
As far as repayment is concerned, the NRI requires paying the
Equated Monthly Installments (EMI) cheques through his non resident
ordinary (NRO) account. He is not allowed to repay through the
savings account (if any) in India.
Tenure of Loan
There is no difference in the rate of interest for NRI home loans
and the loans availed by Indian residents. But tenure of loans
is what differs. Indian residents can avail home loans for 20
years or even more but leading banks or HFCs offer home loans
to NRIs for a maximum period of 15 years.
A view on Legwork Involved
NRIs need to submit extra documents including a copy of the passport
and a copy of the work contract. The latter is also known as the
contract card or labour card which is one of the most important
documents required only for NRI home loans. The borrower also
requires submitting property related documents such as:
-
Original title deed tracing the property
title for a minimum period of the last 13 years,
-
Encumbrance certificate for the last
13 years
-
Agreement of sale/construction, if any
-
Approved plan/license
-
ULC clearance/conversion order.
-
Receipts for having invested the margin
money through normal banking channels from the NRE and/or NRO
account in India.
