Finance is No Longer a Constraint for NRIs

There are different kinds of loans available in India meant for different type of borrowers. There are loans specifically designed for business, education and to meet different kind of personal needs.

The interest of the NRIs on the loans available in India is increasing over the years. It is because the NRIs have developed an interest in the acquisition of property in India for future occupation and investment. To help such kind of borrowers the financial institutions in India are offering loans specially meant for the NRI.

Loans meant for housing in India are available for the construction or purchase of houses anywhere in India. The maximum amount of the NRI loans for the construction of houses in India is Rs.1 crore. In other words, such loan will share 85% of the cost of the house to be constructed or purchased. However, the loan amount may vary from lender to lender depending on the loan lending capacity .Normally, the maximum repayment period of this loan is 10 years and the duration may vary depending on the category of loan. The amount of loan, rate of interest and the repayment term may also very depending on the country where the applicant is residing.

This kind of NRI loans are to be paid of in EMI and it encompasses the principal and the interest. The repayment of loan in installment starts right form the next month that follows right after the disbursement of the loan. The EMI for the loan is paid every month, on or before the due date.

The borrower can avail of this kind of NRI loans either online or offline. However, they would always find it convenient to avail of this loan online as in this kind of deal many of the loan process can be completed just within ones comfort zone. It helps the applicants complete most of the task without their visiting the lender's premises. 

As such, the borrowers save much of their effort by this mode of deal. As there are a good number of financial institutions in India offering Nri loan they are in a cut-throat competition among themselves to draw the maximum number of customers. Hence, such a scenario gives the borrowers the privilege to negotiate for a favorable deal. This scenario gives the prospective debtors an advantageous position to compare the rate of interests, terms and conditions associated with the loans provided by the various lenders. Devoting a good amount of time in research one can end up with the best loan deal.

The borrowers must also understand that this kind of home loans can be divided into two groups. The home loans that call for an asset against its procurement are popularly known as secured loan. And, when it is not mandatory on the part of the borrower to pledge any property against the finance, then it is termed as unsecured loan. Of course, this difference may bring about difference in the amount of the finance, the loan's rate of interest and the repayment term.

Moreover, pledging a property may also expedite the loan process as the pledge lowers the risk on the part of the lender against the potential loss of the loan. Thus, the choice if left with the borrowers to decide what they need.

[Source: http://ezinearticles.com/?Finance-is-No-Longer-a-Constraint-For-NRIs&id=1778950]

Nri Home Loans

The NRI dream home in India!

Owning a home is a dream for most of us and thanks to the diverse home loan schemes available to make that dream a reality. How is this different in case of Non- Resident Indians (NRI)? Is it equally easy for them to obtain a home loan and own the property of their choice? NRI home loans are now easily available in India, subject to fulfillment of certain conditions.

NRI Status:

When it comes to defining a NRI, all banks and financial institutions go by the definition specified by the Reserve Bank of India (RBI) i.e., “An Indian citizen who holds a valid Indian passport and stays abroad for employment or carrying out business or vocation under circumstances indicating an intention for an uncertain duration of stay abroad is an NRI.  So those eligible for home loans under this category would be those employed or carrying out business outside India, those posted abroad by the Indian government or companies or those Indians serving in international agencies like the IMF, UN, World Bank etc.

Properties eligible for loan:

Home loans can be availed for any property ready for possession or under construction, construction of property on an owned plot or for alterations to the existing property. Buying of a plot also qualifies for a home loan.

Maximum amount of loan allowed and other conditions:

Income and educational qualifications play an important role in deciding the maximum amount of loan available to an NRI.  Banks allow an advance of 80-85% of the value of the property, subject to the Gross Monthly Income (GMI) of an individual. Maximum amount of loan granted, is in the range of 36-40 times GMI. Some banks also go by the ratio of Equated Monthly Installment to Net Monthly Income (EMI/NMI).

For E.g.: State Bank of India puts a limit of 40% of NMI against EMI for NRIs with annual income up to Rs 2 L.  For those earning between Rs. 2-5 L, it is 50% of NMI; and for individuals earning more than Rs. 5 L annually, it is 55% of NMI.

Few other banks set different criteria depending on educational qualifications, place of residence etc. For E.g.: With ICICI Bank, for those residing in the Middle East, the minimum annual salary required is 36000 Dhms if the tenure is within 5 years and for tenures between 6-10 years the income requirement is set at 48000 Dhms. While for those residing in the USA and others the respective limits are 30000 USD and 42000 USD. The criteria differs for self-employed, depending on the educational qualifications.

It is important to note that only graduate NRIs can avail home loans in India.

Tenure of loans:

While a resident can avail loans with a maximum tenure of 30 years with some banks, tenure for NRI home loans is restricted. It is available within the range of 5-15 years. Extension beyond the term of 15 years is solely at the discretion of the bank and in exceptional cases only.

Rate of Interest:

There is a higher rate of interest charged on NRI home loans to cover the higher risk involved. There is generally a margin of 0.25% -0.50% charged.

Documents required:

The documentation required for NRI home loans is different from resident home loans. Documents normally required are copies of the passport, valid visa and work permit, contract of employment, work experience certificate, salary certificate and statements of NRENRO accounts. For those residing in the Middle East, copy of employment card is also required. Salary certificate should be attested from the embassy if the salary is not getting credited to a bank.

Submission of documents: You need not wait for your next trip to India to apply for a home loan. Many of the banks have branches in places like Dubai, Singapore, London etc. where you can apply for home loans. Few banks like ICICI, HDFC and Axis also extend the facility of online submission and status updating.

However, you would require executing a General Power of Attorney in favor of a resident Indian who would act on your behalf with the bank. If POA is issuing while you are abroad, it needs to be signed in front of the embassy official.

Repayment of loan: The repayment of home loan for nri can only be through Non-resident External (NRE) or Non-resident Ordinary (NRO) accounts with remittance from abroad. No other funds can be used for repayment of these loans. The repayment needs to be made in Indian Rupees only.

Change in status from NRI to Resident: When there is a change in status from NRI to resident the loan is reworked according to the revised income and interest applicable is charged and the tenure is also revised.

Source: https://blog.bankbazaar.com/the-nri-dream-home-in-india/

Documents Required for NRI to Buy Home in India- Home Loans

There are many Indians who have settled abroad and are employed there. Even professionals as well, as business people have many financial dealings from foreign countries. With internet banking and online finances available foreign business has become much easier. Though there may be financial freedom and all luxuries of life the people having Indian origin definitely miss their mother land. There is a need felt by many to own a home in India so that they have a base in their home town. Offering searching for property assistance and legal advice it has become very easy for an NRI to select a house and purchase it on home loan.

With office in so many Middle East countries the bank does have an upper hand among other lending institutions. Dubai, Sharjah, Kuwait, Oman, Qatar, Al Khobar, Jeddah, Jubail, Riyadh are the places where an NRI can avail a loan from this bank and purchase property, land or house in India.

Since the country rules and regulations are different these NRIs have to provide with certain documents to get their home loan approved easily. Copies of the employment contract which needs to have the stamp of the Embassy or employer needs to be provided. 

This proves as an identity as well as employment proof of the borrower. The contract of the job and the duration the borrower has been working in that country will allow the bank to assess the financial standing of the individual. This will help the bank to get a picture of finances of the borrower as well as their qualification and repayment capacity, which is very important for the lending institution.

Visa which has to be stamped on the passport of the individual is a very important document required for approval of home loan for the NRI.

Past jobs and resume will also help in understanding the places the borrower has worked, his experience and his financial position. Salary slips or other salary proofs will be required to prove the monthly take home salary of the borrower. Overseas bank account and other details of income and expenditures will also considered by the bank as they have to risk a large sum by offering as loan. Even the company where the individual works will be scrutinized and the company profile will be considered to understand the individuals post in the company. A passport sized photograph as identity proof will also be required.

The bank definitely will have to undergo vigorous survey to find out about details of NRI. Since the company the person working will also be considered and if they are working in a reputed company that gives the bank a positive sign to approve the home loans of this NRI.

[Source: http://homeloans-simplifiedfacts.blogspot.in/2011/07/documents-required-for-nri-to-buy-home.html]