Loans For NRIs In India

People choose to move to a new country for many reasons like education, better economic opportunities, or to start a new life. Moving to another country has its fair share of challenges when you are adjusting to entirely new living conditions. Mainly, unforeseen financial expenses. And it can be extremely difficult to get financial aid to meet your urgent financial needs when you have just moved there or are staying only on a temporary basis.

Fortunately, for a non-resident Indian (NRI), there are various types of loans that are offered by major banks in India to meet your financial expenses or for other purposes. Popular loans available for NRIs include:

• Personal loans
• Home Loans
• Car Loans

Personal Loans 

You can take personal loans to take care of your emergency financial needs including any large purchases, consolidating debt, medical emergencies, travel, education, even home renovation. Most banks in India provide secured NRI loans, meaning you need to provide a collateral or security such as home, high valued asset, even bank fixed deposits. In case of unsecured personal loans where you need not give any collateral, it will be based on your income details and/or creditworthiness among other factors. The process of getting these loans is not complicated although the criteria vary from bank to bank. 

Common eligibility criteria for personal loans in India 

• Age is minimum 21 years and maximum of 60 years (salaried) or 65 years (self-employed)
• A person should be either a self-employed individual or a salaried professional in a foreign country. The salaried person should be employed for at least one year in the same company. The proof of income is mandatory when applying for loans
• For self-employed individuals, the continuity of business proof is mandatory to avail of the loan. The business should be in operations for at least 3 years. Some banks do waive this requirement if you have real estate in India 
• Keep in mind that most banks give specific income criteria to get a personal loan. This requirement may vary depending on the country you are employed in

Documents requirement for personal loans

Banks go through several documentation processes to verify the background details of the applicant. NRIs are required to provide the following documents to avail of the loan.

• Identity proof
• Address proof
• Copy of visa and passport
• Salary certificate 
• Recent passport size photos
• Bank statements for at least for 12 months

In addition, you will need to provide the identity and address proof of your co-applicant. 

How to apply for a Personal loan?

It is possible to apply online for personal loans if you are not able to visit the bank in person. But it is better to check with the bank of your choice about the availability of the loans and the online application. They can guide you through the process. It may be easier for NRIs who are already customers of the Indian banks. 

It helps if you have a relative in India so that they can go to any bank branch and enquire about the loans. Most banks have NRI help desks, or you can do it via email or phone.  

Additional points to consider when applying for NRI personal loans:

• Personal loans are unsecured loans meant for urgent financial needs. Since there is no collateral, the interest rates are higher as compared to other loans like home loans. Banks also check your creditworthiness apart from other factors to decide your interest rate.
• You can get the personal loan amount in your NRE or NRO  bank accounts. The banks may provide the loan either in Indian rupees or foreign currency as per their policy. You may choose the one you preferred at the time of getting the loan. Always check with your bank about the mode in which the loan amount will be disbursed.

NRI has the option of opening saving accounts or recurring deposits or fixed deposits in Indian banks. Read more on what bank accounts an NRI can open in India.

• A co-applicant is required to apply for the loan. He/she can be a close relative of you and can be either earning or non-earning. It may be harder if you have no relatives back in India. Check with your bank about the policy on the co-applicant if you need to. 
• Every bank’s personal loan has different rates and charges. For instance, a bank that gives a lower interest rate may charge a higher processing charge. Read up on the interest rates, processing charges, the penalty for foreclosure, terms, and conditions, etc. before applying. 
• The bank's website has a personal loan EMI calculator. The online calculator is very easy to use. You just need to enter the loan amount, interest rate, and the tenure of the loan. You will get your EMI in seconds. 

Top Indian banks offering personal loans to NRIs

• State Bank of India
• ICICI Bank 
• HDFC Bank
• Kotak Bank

With so many options available, it’s best to compare and go for the one that is suitable for you. Look for a good rate and a good repayment facility while choosing one.

Home Loans

You can take NRI home loans for purchasing a flat or plot, or home construction and renovation. The lowest interest rates start from 6.85%. Several banks in India like Axis, SBI, HDFC, Kotak, Citibank, Federal Bank, ICICI, etc provide various home loans to Non-resident Indians (NRIs) and Persons of Indian Origin (PIO).

Eligibility (may vary from bank to bank)

• Age should be between 21 to 65 years 
• The person should be salaried or self-employed 
• Work experience abroad should be at least 1 year for salaried and at least 3 years for self-employed
• Salary criteria 

Basic document requirements

• Application form 
• PAN Card
• Identity Proof (Passport/Visa copy/ Aadhar Card/ Driving License/Employee ID)
• Proof of Address ( Overseas & Indian Address) 
• For PIO or Overseas Citizenship of India (OCI) applicants: PIO or OCI card and stamped and notarized necessary documents

Income and other documents

For salaried applicants

• Latest 3 months payslip
• Latest 3 months bank statements showing salary credits
• Appointment or contract letter 
• Domestic NRE/NRO account statement of the latest 6 months
• Power of attorney details 
• Overseas credit report 
• Form 16 and IT returns of the past two years  
• Property documents

For self-employed applicants

• Latest 6 months bank statements
• Two years IT returns
• Latest 3 years audited financials with CA seal and sign
• Proof of business continuity (minimum 3 years)
• The balance sheet for the last 3 years  
• Business profile and office address 
• Property documents

Documents for Balance Transfer/Loan Takeover 

• Latest 12 months loan account statement with an outstanding letter 
• Existing loan details 
• 6 months bank statement from where EMI has been deducted
• The original list of documents from the previous lender 

You can use the online home loan calculator on the bank’s website to check your loan EMIs by entering the loan amount, tenure, and interest rates. 

Car Loans

As an NRI, you can apply for car loans in India whether you are a salaried employee or a self-employed professional in a foreign country. Major banks like SBI, Federal Bank, Bank of Baroda, etc, offer car loans to NRI. 

Eligibility

• Age should be 21 years to 65 years old
• A resident Indian has to be a guarantor to apply for the car loan

Documentation required for a car loan in India

• Car loan application form
• Hypothecation Agreement
• Guarantee Agreement 
• Arrangement Agreement 
• Declaration form
• Power of attorney (if needed by the applicant)
• Valid passport 
• Valid work permit
• 3 passport size photographs
• Income proof
• Address proof
• At least 3 years of work experience abroad 

Documents for Guarantor (resident Indian)

• Proof of residence
• PAN card / Passport copy/ Voter ID
• 2 passport size photographs
• Signature proof from the banker 

The car loan interest rates by the banks are applicable both to resident Indians and NRIs. For example, the SBI car loan interest of 10.45% is the same for both NRIs and Indian residents.

There are many other loans such as property loans, education loans that banks in India offer to NRIs. Always check with the banks and financial institutions for the availability of loans that you are interested in.

You can repay your loan through remittance sent through normal banking channels, or your NRE accounts or from your income earned from an investment like real estate in India. Your relatives can also repay the loans on your behalf.

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