Everywhere you look, be it in TV ads or newspaper ads or even hoardings next to your home, you will find a vast array of India home loans offered by various banks.
India Home Loans: RBI Specifications for NRIs
Most Indian banks offer special privileges to non-resident Indians or NRIs, who are looking for good loans to invest in real estate and housing in India. NRI housing loans are primarily available with financial institutions including ANZ Grindlays Bank, ICICI Bank, HDFC, HUDCO, CITIBANK, LIC and so on. India home loans are easy to understand but who can be classified as an NRI? The Reserve Bank of India (RBI) has clear specifications on this. Based on the RBI specifications, an NRI has to be an Indian citizen:
- holding an Indian Passport
- living abroad for business, employment or vacation
The RBI’s specifications defining an NRI include persons who intend to stay abroad for an infinite period. All the banks in India follow these specifications while offering home loans to NRIs. NRI housing loans are also available to government servants deputed abroad.
India Home Loans: What is the Limit?
An NRI is given a maximum of Rs.1, 00, 00,000 or 85% of the cost of the property as home loan, whichever is lower. The interest rate varies from bank to bank, but typically falls between 11.25% and 14.25% per annum. A processing fee of a maximum of 2% of the loan amount is payable while applying for loan. The banks also consider other factors such as one’s repayment capacity and savings history while sanctioning the loan amount.
India Home Loans: What are the Documents NRIs Are Required to Submit?
An NRI is required to submit the following documents along with the application while applying for India home loans:
1. Employment/Residency related documents:
- Recent salary stubs
- Employment contract
- Employer issued Identity card
- Latest work permit
- Visa stamped on the passport
- Overseas Bank Account Statement for the last four months
- Continuous Discharge Certificate (if applicable)
2. Property Related Documents:
- Payment receipts made for buying the home
- Copy of approved drawings of proposed construction/purchase/extension
- Property’s sale deed agreement including cost estimation made by engineer
- Allotment letter from the co-operative society/association of apartment owners
3. Power of Attorney
The repayment period of these loans spans three to ten years. A loan seeker can repay the loan through Equated Monthly Installments (EMIs) once the full disbursement takes place. To make EMI payments, an NRI has to send post dated checks from his/her non-resident account in India.
