NRIs/PIO/OCI are elogible for NRI home loans in India just the same as Indian residents. Although there are not major differentiation in loans to nri or resident Indians yet their are basic differences in the eligibility for an nri loan. We will discuss here some of the criteria that NRIs have to fulfill in comparison to residents.Mostly these differences are due to increased risk for banks when dealing with out of the country customers.
While there is no education requirement for resident Indians to qualify for a home loan when it comes to nris an NRI has to be graduate.There is also a need to fulfill minimum monthly income of $ 2,000.
Tenure of home loan to an NRI is also shorter as compared to the tenure of home loan to a resident Indian. Resident Indians can avail home loan to the tenure of 20 years and sometimes even to 30 years but NRIs have a maximum tenure limit of 15 years imposed on them.
Documentation required to be submitted by NRIs is also a lot more than the requirement for residents. Following documents could be asked from NRIs.
- Passport and Visa
- Appointment letter or contract from the employer of the NRI
- In case of NRIs employed in the Middle East, the labour card/identity card.
- Pay slips specifying name, date of joining, designation and salary details.
- Bank Statements for the last six months. And also Property Documents will be asked for:
- Original title deeds tracing the title of the property for a minimum period of the last 13 years.
- Encumbrance Certificate for the last 13 years.
- Agreement of sale if any.
- Approved plan/license.
- ULC clearance/conversion order etc.
- Receipts for having invested the margin money through normal banking channels from the Non-Resident ( External ) account in India and / or the Non-Resident ( Ordinary ) account in India.
- Latest tax paid receipt.
The NRI also has to route his payments/EMI (Equated Monthly Instalments) cheques through his NRE/NRO account. NRIs cannot make payments from another source such as his savings account in India.
Power of attorney(POA) may also be required for an NRI home loan. The POA is required because NRI the borrower will not be based in India and as such bank would need a representative in lieu of the NRI to deal with. Although not mandatory, the POA is usually drawn on the NRI’s parents/wife/children.
Interest rates are another area where NRI loan is different from the resident Indian loan. Home loans to NRIs are usually costlier. The difference is to the extent of quarter to half percent.
Finally, NRIs should take due care while selecting their bank for NRI home loan. Considering the geographical distances involved, it is important that banking services are easily available like online banking.
