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Personal Loan – A Boon For Nris

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By Author: NRI Taxation
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Owning a personal heaven (read home!) of choice is a dream of every human. It is more a necessity than a luxury to have a beautiful and well-furnished place you can call home. Home loans provided by various Banks and Housing Finance Companies (HFC's), providing finance to the citizens have come the rescue of those willing to convert this dream into reality. It's not just the citizens who are availing these, but even NRIs, whose needs are being looked into, as well. Regarding home loans for NRIs, various queries like "what exactly are they, what do they do, who can avail them" may rise in the minds of many.

How the government defines NRIs?

NRI's are Non Resident Indians, who are the citizens of our country, and who hold a valid document like, say the Indian passport.
They stay abroad for employment or for carrying out a business. Every bank follows the RBI guidelines to provide a home loan to the NRI's who are recognized under Foreign Exchange Regulatory Act, 1973.
Specifications for NRIs intending for a home loan

Home loans for NRI's are available for construction of new houses or flats, purchase of old houses or flats, flat addition, alteration of existing houses, renovation, repairs etc. NRI's should fulfill certain eligibility criteria in order to get the home loans. The documents required for resident Indians and NRI's vary in few respects. These include the age of the applicant which should be at least 21, should be a graduate, the income they get which should be a minimum of 2000$ per month. In addition, the numbers of dependents are also considered.

Other important considerations

• An NRI can get a maximum of 85% of the cost of property.
• Payment options are critical for providing the loan. It should be only through the Equated Monthly Installments (EMI), which also include the interest and the principal amount calculated on monthly rests.

• Payment of EMI is by issuing post-dated checks from his/ her Non Resident External (NRE) or Non Resident Ordinary (NRO) or Non Resident (Special) Rupee Accounts (NRSR) in India.

• They are also provided with various facilities like Step up Repayment, Flexible Loan Installments Plan, Trache Based EMI, and Accelerated Repayment Schemes etc., for the repayment of the loan.
An NRI applicant is eligible to get a home loan ranging from a minimum of five lakhs to a maximum of 1crore, depending on his repayment capacity and the property cost. The repayment tenure of an NRI is different. In addition, the rate of interest at which the home loans are offered to NRI's differs to an extent of 0.25%-0.50% from that of resident Indians. They can't claim tax benefits, and more over, need to file tax returns to become eligible to get the home loans. http://www.nonresidents.in/

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