As far as NRIs are concerned, every bank and financial institution follows the definition prescribed by the Reserve Bank of India (RBI): An Indian citizen with a valid Indian passport who resides abroad for employment or carrying out business or vocation under circumstances indicating an intention for an uncertain duration of stay abroad happens to be an NRI. So, such individuals can seek home loans in India.
Assets Suitable For Loans
It is possible to take home loans for buying any property that is up for grabs or under construction. It could also be availed for building property on a legally owned plot or for renovating an existing property. Lastly, the home loan is also meant for purchasing a plot as well.
Important Prerequisites For Getting Loans
For an NRI to avail loan, Gross Monthly Income (GMI) and educational qualifications are decisive in determining the maximum amount. Banks usually provide an advance of 80-85% of the value of the property but based on the GMI of an individual. Certain banks even opt for the ratio of Equated Monthly Installment to Net Monthly Income (EMI/NMI). However, it is to be noted that loan is accessible only to graduate NRIs.
The tenure of loans for NRIs is restricted, unlike Indian residents. The period ranges between 5-15 years. To go beyond 15 years is purely up to the bank and allowed only in exceptional circumstances.
NRIs need to produce documents such as passport copies, valid visas and work permits, contracts of employment, certificates establishing work experience, salary certificates and statements of NRE\NRO accounts. For the ones staying in the Gulf, a copy of the employment card has to be furnished. Importantly, a salary certificate has to be attested by the embassy in case the salary is not credited to a bank.
Mode Of Repaying The Loan
The availed loans can only be repaid via Non-resident External (NRE) or Non-resident Ordinary (NRO) accounts by remittance from abroad.
Do NRIs Need To Be Present In India To Take Loan?
Individuals are free to apply for a loan from anywhere as most Indian banks have branches abroad as well. Certain banks like ICICI have the provision of online facilities to avail of the loan as well. But the individual in question must grant Power of Attorney to a trusted person in India to deal with the bank in your absence. In case the Power Of Attorney is issued when an individual is staying abroad, then the same document has to be signed in the presence of the embassy official.