Buying a home in India with a loan is a convenient and quick procedure for Non-Resident Indians (NRIs). Most banks and Non-Banking Financial Institutions offer such loans at competitive interest rates.
Here is an insight into NRI housing loans. The six factors mentioned below will help you gain a better understanding of such loans.
You may apply for a loan as a sole applicant or along with a co-applicant. You will need to submit the following documents along with the application form.
- Passport copy
- Appointment letter or employment contract
- Salary slips or certificate
- Bank statements of last six months showing salary credits
- Last six months bank statements of Non-Resident Ordinary (NRO) or Non-Resident External (NRE) account Valid visa stamp on the passport
- Property-related documents, such as title certificate, sale agreement, and others
- Loan amount
Based on your income and existing loan obligations, the lenders determine your repayment capability. You may be eligible for an amount ranging between INR 10 lakh and INR 10 crores.
- Interest rates
Every financial institution levies a different rate of interest. An important factor that is analyzed while determining the interest rate is your credit history. If you have a high credit score, you may be able to obtain a lower interest rate and vice versa. It is recommended you check your credit score before applying for a housing loan. You may also opt for a floating rate of interest, which helps reduce your repayment in case the market rate decreases.
- Loan repayment
The borrowed amount is repaid in Equated Monthly Installments (EMIs). The EMI schedule depends on the interest rate, loan amount, and the tenure. Lenders offer flexible home loan tenure between one year and ten years. You may also choose an accelerated EMI schedule where the amount increases each year as your annual income rises. This helps reduce the effective loan tenure and the repayment amount.
- Purpose of finance
The loan amount may be used for various purposes, such as buying a ready or under-construction property. You may also utilize the funds to purchase a plot of land and build your home. Furthermore, lenders allow you to renovate or extend an existing property with these funds.
- Processing time
The process from loan application to sanction is completed within a short period of time. Furthermore, it is hassle-free and simple. You may also appoint a Power of Attorney (POA) in case you are unable to be present in India to complete the process.
Almost every financial institution in India provides housing loans to NRIs. You may conduct extensive research on these options on the Internet. You may refer to blogs, forums, and other online resources to know more about such loans. This information will help you compare the terms and conditions offered by various lenders in order to make an informed decision.