Housing loans help you fulfil the dream of becoming a homeowner. You either approach a bank or non-banking financial company and repay them in equated monthly instalments. You do this within a specific period, either on fixed or floating interest rates. Banks offer such loans to the resident as well as non-resident Indians. However, the rules and terms related to the NRI home loan are different from the rest. So, here are some common FAQs for the NRIs.
What makes you eligible for NRI home loans?
For qualifying the NRI home loan eligibility, you should reside outside India for at least a year or more. You cannot apply for the loan if you have lived overseas for less than a year. You must show your business or study details for fitting the eligibility criteria.
How much loan amount can I get?
As an NRI applying for the loan, you receive a maximum sum percentage of 75% to 80% of the actual property cost you wish to buy. The balance needs to be borne by you and paid as a down payment for buying the property.
Based on what factors does the lender decide the loan amount?
The maximum finance you get differs between banks. Lenders consider the home loan for NRI eligibility factors like age, annual income, employment status, and the property type you wish to buy before deciding the amount you get.
What are the ways of loan repayment?
Repay the NRI home loans by paying the EMIs, until the loan gets exhausted. You do so through channels like your non-resident ordinary or non-resident external accounts in India. You may prepay the loan before the specified due date. However, that involves some penalty.
What is the tenure for repaying the loans?
The tenure differs between lenders. Most banks enable you to repay the loan for terms that last up to 20 years. Some lenders also offer extended tenures up to 25 to 30 years, but then it depends on your age at the time of application. The higher term is usually offered to younger applicants who have years of employment ahead of them at the time of application.
Is a joint loan application possible for NRIs?
Yes, you can apply for joint NRI home loans. Your co-applicant must be an Indian resident. This is again subjective and depends on the lender. Usually, the co-applicant should be an immediate relative, preferably your spouse. Father or mother can apply along with their sons. If a daughter is the co-applicant, she should be the primary applicant and the parent the second. This helps to reduce the NRI home loan interest rates.
Two brothers can apply for joint loans, but two sisters or brother/sister cannot serve as joint applicants as this could raise legal concerns after their respective marriages.
