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NRIs can avail loans in India, but not all types of loans as available to a normal resident. There are not a lot of loans available to NRIs. Many public sector banks and private sector banks provide loans for NRIs. Following is a list of loans available to NRI’s in India:

• NRI home loan

• Overdraft against fixed deposits

• Loan against securities

• NRI car loan

NRI Home Loan

NRIs avail home loans in India to purchase or construct a property in India. They can even take loans for the improvement of their property in India.

Purpose of home loan

For the following purposes an NRI can take a home loan in India:

• Purchase/ construction of house/ flat
• Purchase of plot for construction of house thereon
• Repairs/ improvements/ extension of the existing house/flat (take a look at the site here for complete report about it).
• Take-over of housing loan availed from another bank / FI

Eligibility

• Minimum age is 25 years and the maximum age limit is 60 years or retirement age (whichever is earlier) at the time of loan maturity.
• If you are a salaried applicant then you should have been abroad for a minimum period of 1 year. If self-employed then for a minimum period of 3 years you should have been abroad.
• Should have a valid passport
• Existing NRE/NRO account holder with the concerned bank.

Loan amount

• Minimum loan amount if Rs 3 lakhs and the maximum amount depends on the Loan To Value(LTV) ratio as per following:

• Repayment period is up to 30 years, in case of repairs it is 10 years
• Moratorium period is 48 months
• Processing Fee is 0.5% of the loan amount + applicable Service Tax & Surcharge
• There is no penalty for pre-closure of home loan.

Repayment

Under the RBI regulations, the repayment of the home loan by NRIs can only be made by remittances from abroad through normal banking channels or through NRE account/NRO account or out of rental income derived from the impugned property. The amount must be payable in Indian Rupees only.

Tax benefits

Tax benefits available to NRIs are same as available to resident Indians. The benefits are:

• The principal amount deduction under section 24
• Interest amount deduction paid under section 80C
• Additional deduction for Rs 50000 under section 80EE

Documentation

To get full details for documentation required for home loans contact the concerned bank.

Loan against Fixed deposits

NRIs can get an overdraft against their NRE FD / NRO FD / FCNR Deposit. The overdraft limit is different for all the types of deposits.

If there is an outstanding overdraft against the account of NRI then premature withdrawal is not allowed
Interest rate on Overdraft against FCNR deposit will comprise of FCNR deposit rate, Swap cost and Spread
Repayment can be made either by adjustment of the Fixed Deposit or by fresh remittances from outside India through normal banking channels.

Loan against securities

Some banks in India provide loan against securities to NRIs. This loan is easily available and there is no need any other collateral, your pledged securities act as collaterals

• It is a secured loan. Shares, debentures, mutual funds etc. act as collateral in this loan
• Loan against Securities is provided only for personal purposes. The loan amount cannot be used for speculative activities, any purpose linked to capital market activities, or for any anti-social purposes.
• Generally, the loan tenure is 12 months but one can easily renew or review the loan
• There are no prepayment charges for loan against securities
• The processing fee for this loan is quite low.
• The loan amount depends on the security given by the borrower.
• This loan is available to NRIs for only a few securities
• There is a margin ranging from 50%-80% of the value of securities for loan against securities.

For documentation and eligibility please contact the concerned bank.

NRI Car Loans

NRIs have started taking car loans in India in order to fulfil their dream of driving high-end cars. NRIs who frequently visit in India and have a passion for cars generally avail this loan. There are also some NRIs who want to purchase a car for their relatives living in India NRI car loans can be availed for purchasing a new or a used car.

Features

• The loan will be in the name of the NRI, who will be paying the EMIs but the car will be registered in the name of the guarantor (Resident Indian).
• Loan amount eligible is derived on the basis of the Applicant’s income (no ceiling)
• The loan tenure is 7 years
• No pre-payment penalty
• No processing fee
• Interest rates for NRIs are same as those for resident individuals

NRI Car Loan Eligibility

• NRIs with a Resident Indian as a guarantor can apply.
• Both applicant and guarantor, should be at least 21 years old and not more than 65 years old.
• The loan has to be repaid by the time the applicant is 65 years old.

Margin

15% of the on – road price of the car, which includes taxes, insurance, accessories and extended warranty total maintenance Package etc. The maximum cost of accessories, extended warranty and total maintenance package should not exceed 5% of the ex-showroom cost of the vehicle or Rs. 50,000/- whichever is lower.

Repayment

Funds for repayment may be:

• Remittances from abroad through normal banking channels
• Out of funds from NRE / FCNR (B) / NRO accounts of the applicant
• Remittances out of local funds by close relatives of NRIs

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