Any Non Resident Indian (NRI) who has applied for a home loan recently will know that tougher affordability verifications adopted by most banks have made it more stressful. Lenders too don’t have a choice but to look in forensic detail at loan applicant’s income details, credit history and spending habits as home loan amount are usually so huge that they too need to be assured that it will be settled duly in the stipulated time. Bank of India Star Pravasi Home Loan scheme takes a more empathetic approach in this regard. Wonder how? Read on to know more about BOI’s home loan product for NRIs.
Features & Benefits of the BOI Star Pravasi Home Loan:
i. Purpose of the loan:
- To buy or build a new house or flat or villa.
- To refurbish, extend or restore your current home or apartment.
- To buy a plot of land solely for the purpose of building a home.
- To refinance your home loan.
- To take over previous home loan from another bank.
ii. Quantum of Loan:
- To construct or buy a house or apartment worth up to INR 3 crores in rural and semi-urban areas and up to INR 5 crores in major metro cities like Delhi, Mumbai, Hyderabad, Kolkata, Chennai and Cochin.
- You can avail up to INR 50 lacs for any kind of maintenances, repairs or extension to your home.
- You can apply for up to INR 1 crore to buy a plot for the purpose of building a house.
- Loan for buying of domestic articles (utensils, furniture, curtains etc.) along with housing loan for furnishing the place at 15 percent of Home Loan amount or up to INR 5 lacs is presented as per the Secured Personal Loan option with same Interest Rate as appropriate under the Star Pravasi House Loan.
- You can take up to 10 years to repay this part of the loan including moratorium time period.
- You cannot apply if the loan amount you require is less than INR 1 lacs if you are residing in a metro city or urban region.
- Mortgage or Equitable Mortgage (1st charge) on your plot, house or apartment.
- Credit Information Report:
- Report to be produced from CIBIL or any other official credit rating agency in India.
- The loan applicant to give in credit report from a Credit Rating Agency from the residing country if such reports are available with no trouble.
- The report can be easily accessed in countries like UK, USA, Canada, Germany, South Africa, Malaysia, Singapore, Hong Kong, Japan, South America etc.
- This requirement can be waived off by the authority regarding those nations where such reports are not easily obtainable.
v. Interest Rates:
The current base rate is 9.70 percent.
|For limits up to INR 75 lacs: Base Rate
|For limits above INR 75 lacs: Base rate + 0.25 percent
More Unique Features:
i. Personal Accident Insurance for Free:
You can avail personal accident insurance cover for loan up to INR 5 crores for the individual borrower. This will cover accidental demise as well as permanent total incapacitation) according to the terms and conditions of insurance plan that covers the remaining loan as on the day accident occurred. The insurance renewal can be at the discretion of the bank.
ii. Life Insurance:
Life Insurance cover is also available to Pravasi home loan debtors, at reasonable premium against risk of demise during the loan term as per the Group Insurance Scheme in partnership with Star Union Dai-Ichi Insurance Corporation Limited at your own expenses & option.
iii. Loan for home furnishing:
You can apply for a loan to furnish and deck up the home at a rate of interest as applicable to home loan under the Pravasi scheme
Other Attractive Features:
- Interest on Reducing Balance on a daily basis.
- There will be no advance payment penalty fees on floating rate home loans.
- There is a facility for step up/ step down EMIs as well.
BOI Star Pravasi Home Loan Interest Rate and MCLR Rate:
Bank of India’s Star Pravasi Home Loan scheme offers low floating interest rates for NRI citizens. The rates are dependent on Marginal Cost of Funds-based Lending Rate (MCLR) with effect from April 1, 2016. BOI’s benchmark MCLR for home loans is that of 1 year, which currently stands at 9.4% per annum. This means that every year the interest rate will be reset according to the 1-year MCLR.
The rates applicable to BOI Star Pravasi Home Loans are:
|9.7% (9.4% MCLR + 0.3% Business Strategic Spread)
||9.95% (9.4% MCLR + 0.3% Business Strategic Spread + 0.25% Premium)
Who is eligible for Star Pravasi Housing Loan Scheme?
- All Non Resident Indians (NRIs) holding valid Indian Passport.
- Individuals of Indian Origin with an Overseas Passport as well as a stable source of income.
- They have to authenticate the PIO position by their current passport specifying birth place in India, copy of old Indian Passport if any, information regarding parents or grandparents passports.
Know your facts about being a Co-Borrowers:
- Every co-owner has to be a co-applicants for the Star Pravasi Loan.
- The co-applicant could also be an Indian resident in which case his/ her monthly earnings could also be taken into consideration for estimating the loan quantum or repayment ability.
- But a resident of Non-Indian origin is not allowed to become a co-owner or co-borrower.
Entitled Quantum of Pravasi Loan/ EMI:
Estimation of quantum of home loan is directly linked to your income repayment capacity.
i. Salaried Workers:
- Salaried people can avail 72 times of their average monthly remuneration or six times of the total yearly income based on IT Returns.
ii. Self-employed/ Independent Professionals:
iii. HUF, Proprietorship, Partnership Company or Organization:
- Six times of money accumulations (PAT+ Depreciation) as per Balance Sheet/ P&L Account.
Total Take Home Remuneration/ DSCR:
For Individual Borrowers:
Total Take Home Salary after all the deductions including your current EMIs as well as that of the home loan is specified as under:
a. Total Income Per Month up to INR 1 lakh Minimum – 40 Percent
b. Total Income Per Month between INR 1 lakh to INR 5 lacs Minimum – 30 Percent
c. Total Income Per Month above INR 5 lacs Minimum – 25 Percent
- Bank of India offers you a greatly flexible repayment system that can be custom-made to suit your needs and repayment capacity.
- You have up to 30 years (this includes the moratorium time period of up to 36 months).
- The tenure is dependent on the number of floors if it is a township project in monthly installments, which includes Bank’s sanctioned projects.
- The Pravasi home loan should be repaid regularly as EMIs before the retirement date in case of salaried employees and before reaching age 70 in case of entrepreneurs and independent/ freelance professionals.
- If you (as a salaried worker) can assure the bank of guaranteed post retirement returns, you can repay even after age 70.
Means of Repayment:
- The loan should be settled by remitting EMIs from overseas via regular banking channels for out of funds in your NRE, FCNR or NRO Account in India.
- Preferably, standing instructions shall be delivered for recovering the money from your NRE or NRO Accounts.
- Close relatives (as specified under Section 6 of the Indian Companies Act 1956) of the debtor in India also could pay back the EMIs through their bank account too, if authorized to do so.
- Rental income earned from the property, wherever it is considered for estimation of eligibility also could be accredited straight to the credit of your housing loan account.
Mode of creation of security or implementation of documents:
- The formation of security or execution of documents could be commenced by the home loan applicant if he/ she is present in the country.
- It could also be handled by your Power of Attorney holder, if any. The documents must be signed by the PoA holder by complying with the required guidelines.
- The application should be signed by the borrower himself.
- A request letter from the applicant to the BOI Branch to permit implementation of documents and to create security by PoA holder.
- Power of Attorney can be limited to close relatives like partner, father, mother, siblings, or children of the NRI concerned. In some cases, the PoA other than close family may be allowed by the sanctioning authority.
- Power of Attorney must be implemented according to the approved specimen of the Bank.
- The Power of Attorney must be irreversible.
- The original Power of Attorney must be kept safely with the Bank;
- The PoA must be authorized in the presence of Indian Embassy officials and/ or that of the International Consulate.
- After receiving the PoA in India, it has to be given to the Registrar of Assurance for settlement as well as registration in conference with the legal panel of the BOI Bank.
- Every document signed by the PoA holder on behalf of the principal must have a rubber stamp attached below signature of each of the parties.
- POA should contain the photograph of the of POA holder as well as the signature of the POA holder, both attested by the executants in case the POA is executed in India during the executants visit to India.
- In the event of the PoA being executed overseas, it should entail the photo of the PoA holder accordingly attested by each one of the executants.
- The PoA owner must sign the relevant papers in the presence of the BOI officials, which will be catalogued by the bank.
- You need to mention in the bank’s regular security documents, attendance registry or oral agreement to show that the same is carried out by the lawyer on behalf of the principal.
- The documents must be executed by the PoA holder for and on behalf of the NRI. Once that is done, a letter drafted by the NRI authorizing the document implementation by the PoA owner must be sent to the bank. Same applies to the creation of security by way of mortgage as directed by the bank.
i. General Documents Required:
- A duly filled home loan application form.
- A passport size photograph.
- Photocopies of your Passport with visa stamped on it.
- Self-attested photocopy of your Indian PAN Card.
- Self-attested address Proof in India (only if your address is other than that is stated in your passport).
- The contact information of your closest relative in India.
- Your overseas address proof (Driving License or any Utility Bill).
- Your most recent Credit Bureau Report (applicable to clients living in countries where credit bureaus exists such as UK, USA etc.).
- CIBIL report to be produced by the Bank Branch.
- All the documents related to property.
- Cheque for processing fees, charges for title search report, valuation report, CERSAI registration fees and others levied, if any.
- If there is any excess amount left, it will be reimbursed to you in a specified time.
ii. For Salaried People:
- Work Permit papers.
- Complete address of the company employer along with name and contact info of your department head or boss.
- Employment Contract in the official language of the country along with English translation.
- Photocopy of your identity card supplied by the present employer, accordingly attested by the employer (or HR Department).
- Photocopy of Continuous Discharge Certificate (CDC) for loan applicants working in Merchant Navy.
- Complete details regarding your past occupational records, all self-attested.
- Details of Overseas Bank Account for previous one year where salary is credited along with Bank Account in India, if any-self attested
- Most recent salary slips in original (of the last three months or more).
- Yearly Income Tax Return, filed according to the guidelines applicable in the country where you reside for the past two years.
iii. For Self Employed/ Entrepreneurs:
- Affiliation of a professional organization.
- Government or local body authorization or license to occupy in any business activity
- To be verified by your employer (if he/ she is a Bank, MNC or Central/ State Government Body employer). Else it has to be verified by any of the Bank of India Branch Representative or that of the foreign embassy.
Fees & Other Charges:
i. For Individual Applicants:
|Limit of Loan
||Charged one time, which includes GST.
For every Loan Sum
.25 percent of the home loan amount.
Minimum is INR 1000 &
Maximum is INR 20,000 plus GST
ii. For Partnership Organizations & Corporate Debtors:
Limit of Loan
Charged one time, which includes GST.
For every Loan Sum
.50 percent of the home loan amount.
Minimum is INR 2000 &
Maximum is INR 40,000 plus GST
(Double that of individual borrowers)
iii. For Applicants from Rural Regions:
Limit of Loan
Charged one time, which includes GST.
For every Loan Sum
Processing fees will be 75 percent that of what is applicable to individuals with regard to loans taken by borrowers from rural places from the Rural Bank Branches. This doent include the GST.
Legal Expenses/ Estimation Fees/ Stamp fees/ Applicable CERSAI charges etc.
Please note that processing fees are rebated for those who applied for loans from 11th September 2015 until the end of this year.