Process of Applying for an NRI Home Loan
7 things to consider when applying for NRI Home Loan. When to Apply, Age criteria. Loan Amount, Loan Tenure. Interest Rates, Repayment & Document checklist.
For an Indian living abroad, buying a home in India is an emotion. With India going digital, it’s easy for NRI (Non-Residents of India) interested in buying a home in India to avail of home loans. You need not have to visit India in person to apply for housing loans.
NRI Home Loan in India Eligibility for Applicant
Besides NRI, PIO (Person of Indian Origin) and OCI (Overseas Citizen of India) can benefit from NRI home loans in India.
Every applicant must be above 18 at the time of application. You should have at least 2 or more years of employment in India or 6 months overseas.
While a salaried employee needs to have a graduation or diploma qualification, a self-employed NRI needs a Senior Secondary Certification (SSC) or an equivalent degree. Every applicant must hold a valid Indian passport.
Maximum Loan Amount
- The minimum loan amount sanctioned can be from Rs 15 lakhs onwards
- The loan is given up to 75-85% of the property cost
Home Loan Tenure for NRI
NRI applicants can avail of home loans for a tenure of up to 11 to 15 years. Max to max it may be extended up to 20 years.
The tenure must not exceed 60 years of age or retirement year, whichever comes first, at the time of loan maturity
Interest Rates
To begin with, you can choose between fixed and floating interest rates. For floating interest rates, interest rates will be reset at periodic intervals depending on the market volatility. In a fixed scheme, the interest rate remains the same for 3-5 years irrespective of changes in market trends and changes to the floating rate.
Housing Loan Repayment
For under-construction properties, banks and finance institutions disburse loans in tranches as and when builders demand payment. Lenders charge EMI only on disbursed amounts which is much lower. Contrary to that, some lenders might levy EMI on the entire loan amount, if the sanctioned amount is less.
Moreover, understand that tax exemption can only be availed after the completion of project construction. Check for penalty on pre-payment of partial or full principal amount.
File your income tax in India. According to the income tax definition, the percentage of tax exemption is available on interest paid and home loan repayment for NRIs. , For example, up to Rs 1.5 Lakh on housing loan principal repayment and Rs 2 Lakh on interest payment for vacant house. If rented, the entire interest payable can be claimed. Check the following details before opting for a housing loan in India.
When to apply for an NRI Home loan
NRIs can apply for home loans even before zeroing in on a property. Loans can be sanctioned based on repayment capacity. A pre-approved home loan can help you keep your budget in sight and negotiate better with the seller. All transactions must be in Indian Rupees only.
In case, you transfer back to India permanently, which changes your status from NRI to RI, your loan eligibility and repayment capacity will be reassessed.
NRI Documents Checklist for Home Loan Application
To initiate the request for an NRI loan, eligible applicants must fill out a loan application form from their respective bank along with photographs of every individual involved with authentic signature.
In general, NRI applicants need to provide identity proof (PAN card, passport, driver’s license, voter ID), an attested copy of a valid passport and visa, current overseas residence proof, PIO card issued by GOI. A copy of CDC (Continuous Discharge Certificate) would be required for merchant navy applicants.
Property papers must be submitted mandatorily to the bank. For residential plots, you might have to present a construction permission paper. Submit the sales agreement or allotment letter, to buy an apartment or any residential property. An Occupancy Certificate is mandatory for ready-to-move apartments. Copy of any down payments already made and many other property documents would be required.
These are a few indicative documents mentioned. Banks may ask for additional documents in support of NRI loan application.
Further, the bank will also seek income proof and last one-year bank statements of previous loans, if any. With that, submit 6 months’ overseas salary account statements and the account details of the account for loan disbursement.
Remember, these criteria vary from state to bank. Here’s a quick guide on NRI home loans in India. Obtaining a home loan is now quite simplified thanks to digital advances with most banks and financial institutions verifying it without the borrower’s visit to India.
Taking legal aid for verification and the help of home loan DSA (Direct Selling Agents) can keep you on track with the requirements of an NRI home loan. Experience a seamless home loan borrowing journey with www.theceyone.com DSA service.
