The NRI’s- are the Non-residential Indian’s who are of Indian origin but are residing outside India for employment or business purpose. The NRI’s are considered amongst the wealthiest class people who earn in a stronger currency and thus are amongst the big value customers for the real estate companies and home loan financing companies. Many NRI’s gain a very high amount of money and then transfer the funds to India through remittances and acquire a property in India as per their budget. Special schemes are being available for the NRI’s for opting for home loans. The NRI is a big value customer; thus, the banks must acquire such customers to disburse loans. The NRI’s require additional documents to approve loans like their passport, employment letter, and visa proof of the country of residence. India received remittances of $ 83 billion in the year 2020. Out of these remittances, most of the amount is spent on buying properties, cars & white goods. ETC. There has been a consistent growth in the remittances in India on a year-on-year basis.
The NRI’s are offered loans at an interest rate of 6.90% – 9.70% interest rates. The NRI’s hold a significant market share in the home loans segment of the banks. The primarily targeted properties are in the State of Kerala like Kochi, Trivandrum, Kozhikode & Ernakulam. In Kerala, there is a maximum migrant population being there who migrate to the middle east countries or in western countries as well. The rest of the major markets are the metros & some tier-II cities in India where people migrate to a greater extent or invest in properties in India as an investment or else to reside in India later. The loans can be taken from abroad, and the home buyers who need to transfer the loan amount through remittances in India. Mumbai & Delhi are the most dynamic markets with a maximum number of international travelers among the metros. The NRI who file income tax returns in India can opt for home loans’ tax benefits under the income tax act 80C. The government of India encourages the NRI’s to borrow loans and invest in India from the money brought from abroad through remittances.
Eligibility on NRI loans:
Documents required by an NRI to avail loans in India:
– Aadhar card or passport copy.
– Income tax returns filed in India or abroad.
– Property documents along with the receipt or agreement of the estate.
– Business profile.
– Partnership deed agreement.
– Passport size photos and application form filled up & duly signed by the applicant.
– Income proof of the salary drawn abroad.
The age criteria and the minimum years of experience required out of India can vary from lender to lender. Most of the lenders have criteria for approval of home loans with two years of experience. And the salary criterion also differs from lender to lender. Based on the higher salary of an individual, the loans can be approved for NRI by the lenders.
EMI interest rates
The interest rates being charged are more or less similar as compared to interest rates charged to Indian residents. The interest rates charged are 6-9% per annum on a cumulative basis. And the tenure of the home loans can be maximum of 30 years, depending on the borrower’s age.
The loan installment is accepted by the lenders only in Indian rupees. Therefore, the loan amount should be transferred through remittances through western union money transfers or net banking or NRO [non-rupee resident ordinary rupee account].
Characteristic features of Home Loans
– The salaried customers are provided loans for up to 30 years, while the self-employed are provided loans for 20 years maximum.
– The bank reserves the right to charge a penalty or seal the property in case of delay or default of the home loans.
– The home loan interest rates are identical for the Indian borrowers and also the NRI’s.
– NRI’s can also avail joint loans together along with the family members.
Thus the market for NRI home buyers is increasing in India as many people travel for IT projects and other allied jobs abroad. The NRI is the key valuable customer of the banks in India to whom banks are keen on providing loans to high-value customers. The NRI home buyers need to transfer the number of installments on time to the lender in India, failing to charge a heavy penalty to the borrowers. The terms & conditions of the home loans should be thoroughly are checked by the borrowers before opting for the loans.