Housing and Land Loan for NRI Citizens

When you work abroad, the chances are that you make loads of money. Then, you make plans to invest the money in India. This may be for starting a business or for building a house. Since it is easier to get a loan and then build your house or business, most of the NRIs use the loan option to their benefit.

Types of properties to invest

If you are an NRI you should find out where to get Loans for NRI and apply for the same. The process is simple though you might have to check the bank rates for the loans and choose the one that is suitable for you. There are many properties you can invest in if you have the money. These include property under construction, owned plots, reconstructed property, existing property, houses, land, and apartments. But, every bank has a different criterion for choosing the type of property one may invest in and so you must check with the bank whether you can invest in the type of property you wish to get or not.

Home Loans for NRI

As an NRI, you must remember that the rules are different for NRI and an ordinary resident of India. Yet, many of the banks offer loans that have many beneficial aspects to it. For example, you can apply for a loan for Rs 10 lakh with simplified documentation. You don’t need to provide any collateral or security. The only condition is that the applicant must be a resident Indian and the co-applicant must be an NRI who is a close relative. The interest rates are as per the standard for the market. The tenure of the loan may be between 36 and 60 months.

In certain banks, you can get loans against your fixed deposit in the bank. You can use this to meet unforeseen expenses or for other things like seasonal shopping. One may also use cash certificates and recurring deposits to get a loan. The only condition is that the loan must not have a lien or any restrictions. Further, it must not be in the name of minors.

Criterion for the loan

The banks will allow Home Loans for NRI up to 80% of the property value. If you have a house worth Rs 4, 00,000 then you will get Rs 3, 20,000 as a loan from the bank. It differs from bank to bank but some banks also allow full value of the property. Another way to assess the amount of the loan is they allow 40-45 times the annual income. So, if you get Rs 2, 00,000 as income annually, then you become eligible to Rs 80, 00,000 as a loan. The considerations the banks have to consider you for the loan are like this:

1. Educational qualification
2. Type of job
3. Visa status
4. Other debts
5. Income history
6. Dependants
7. Location
8. Age of employment

One of the criteria for Loans for NRI is that the age of the applicant should be between 21 and 60. The NRIs want to keep the connection to the homeland and so they invest in some real estate. The NRI loan is for salaried people. The tenure is usually for 10-15 years.

In case you want to take benefit from double taxation treaty, then you need to submit the Residency Certificate issued by the income tax department of your country of residence.