The number of Indians moving abroad for studies, jobs or business opportunities has seen a massive surge in the last couple of decades. Historically, millions of Indians have settled abroad, primarily in North American and European countries. A couple of thousands have also been cashing in on employment opportunities in the Middle East.
Tagged as NRIs (Non Resident Indians), this category of Indians are people who are domicile citizens of India with an Indian passport and have immigrated to another country for education, employment or any other legal purpose. There is another category of Indians whose ancestry makes them a PIO (Person of Indian Origin), who are not citizens of India. The magnitude of remittances from the NRI community is massive, owing to the number of people working on a long duration assignment abroad. Banks and Financial institutions provide exclusive banking and loan products based on specific requirement of NRIs.
Leading Indian banks such as ICICI, HDFC, Axis, Kotak and SBI offer tailor made home loan scheme for NRIs at exclusive rates and terms. Financing is extended for a wide range of housing needs which includes purchase of flat/house/plot, construction and towards costs of renovating/repair of an existing home.
Let us look at three leading players in the home loan sector which provide appealing home loan options for NRIs.
Country’s largest private sector bank, ICICI extends home finance options to NRIs looking at buying a house, construction, purchasing a plot and for other housing related needs.
A charge of 0.50 percent of the approved loan amount is deductible as processing fees. Surcharge and prevailing GST rates are applicable on the processing fee.
As a leading private sector bank in India, Axis offers tailor made home loan schemes for NRIs to help them realis their dream of owning or constructing a house and much more.
A banking mammoth, SBI is India’s biggest institution operating in the banking domain. True to its size, the bank offers a plethora of home loan options to NRIs based on specific needs such as purchase, construction and renovation.
Other pre and post sanction charges applicable on case to case basis. No prepayment penalty is levied on early closure of the home loan account.
Depending on the bank you’re applying with, financing is available for construction, purchase and renovation of a house or a flat. Loans are also available for purchasing land for residential use that should not be agricultural or farm land.
Most of the banks allow co applicants who by default becomes the co borrower. Some banks even make it mandatory to introduce a co applicant. They can be your spouse or immediate family members.
NRI Home Loans can be foreclosed before the expiration of the original loan tenure. Penalty will be charged anywhere between 1 to 3% of the outstanding loan amount. Some banks do not charge a penalty for foreclosure. You can negotiate the charges at the time of application.
Please inquire with the bank for more information. Most of the banks do offer the option of switching between fixed and floating that may come with a fee charged on the outstanding amount.
A guarantor is a person who signs up as one who will stand as a surety. Most of the banks in India require a guarantor depending on the loan amount.
Apart from the regulations for the kind of real estate that can be purchased by NRIs in India, the mode via which the purchase of the properties can be financed have been brought into light. When NRIs decide to but a property in the country, there are a number of regulations to deal with. For instance, if a property is purchased in India, it can only be financed through banking channels. Individuals will have to apply for a loan to a financial institutions to finance the property. The emittances, however, for EMIs, can be made from outside the country, but has to be through an accepted banking channels.
18th April 2017