Do you want to purchase a home in India while being abroad? Don’t worry. Staying in foreign country doesn’t make you disconnected from your roots. Just like Indian residents, even non-residents can buy houses. In addition, they can also apply for housing loan in india. Read on to explore how.
Navigating through This Maze
If you are an NRI (Non-Resident Indian) aiming to purchase your home in India, you have abundant financing options, from banks to NBFCs. Thus, getting the funds is not very difficult; however, finding the right option can be a little challenging. Also, you should be careful about a few points that can be decisive elements in your application.
Given below are some key points that must be checked or complied with while considering your financing options.
Eligibility
For NRI home loans, these criteria may differ from one lender to another. Most banks and financial institutions have certain conditions like completing the age of at least 18 years and a specific duration of minimum work experience with the stipulated income. You also need to present a valid passport with a visa as proof of your NRI status.
Interest Rates
You may find somewhat higher interest rates for NRI home loans. This is due to a higher risk of non-payment or default in principal or interest associated with NRI loans. However, you may still shop around for competitive rates and compare various lenders.
Amount of Loan
The maximum loan amount you can avail depends on numerous factors, such as credit history, income level, and the value of the property you are buying. Various lenders offer around 80% of the property’s value as the loan amount.
Repayment Period
The repayment period may differ from 10 to 30 years. It also depends upon the lender and the amount of the loan. Some lenders also offer flexible repayment options like the ability to prepay without penalty.
Tenure of the Loan
It is crucial to choose your loan tenure as per your repayment capacity. A longer loan tenure may imply lower EMIs, but it would result in more interest payment over the life of the loan. Shorter loan tenure can result in higher EMIs, but you would have to pay less interest over the whole duration of the loan. To understand how different tenures impact your EMIs and overall interest payments, you can use tools like the home loan EMI calculator – Kotak, which provides accurate estimates based on your loan amount, tenure, and interest rate.
Documentation
While applying for an NRI home loan, you’ll need to present various documents such as your passport, visa, bank statements, salary slips, photographs, proof of Indian citizenship, and property documents. Before applying, make sure you have all these documents ready with you.
Processing Fees and Other Charges
While applying for an NRI home loan, make sure you check the processing fees and other charges. It comprises the application fees, legal fees, stamp duty, and valuation charges. You should understand the complete cost structure before you sign any agreement.
Process of Getting the Loan
To avail the loan, you must fill out the required forms and submit them to the institution or bank. It has to accompany the necessary documents required for processing. After this, the bank would evaluate if this loan can be granted or not. Once it is approved, you can receive it by signing the agreement.
Conclusion
In a nutshell, availing an NRI home loan can be a complex process if you do not have the right information. Evaluate the above factors, including eligibility, repayment period, interest rates, documentation, and loan amount with the loan tenure.Also, make sure you do not forget to consider the processing fees with other charges to decide on the right financing option for your dream home in India.
