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NRI Corner

General Information for Non-Resident Indians

Loan For NRI

If you are a NRI, acquiring a home loan in India can be a complicated and confusing process. Go through the following information to understand the process of receiving a home loan.

HOME LOANS:

The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulatory Act, 1973. Every bank and housing finance companies follow the RBI guidelines to define NRI – “An Indian citizen who holds a valid document like Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a NRI.

“Broadly categorized, Non-Resident Indians qualifying for NRI housing loans are:

Indian citizens who stay abroad for employment or for carrying on business or vocation outside India or for any other purpose in circumstances indicating an indefinite period of stay abroad;

Government servants who are posted abroad on duty with the Indian missions and similar other agencies set up abroad by the Government of India where the officials draw their salaries out of Government resources;

Government servants deputed abroad on assignments with foreign Governments or regional/international agencies like the World Bank, International Monetary Fund (IMF), World Health Organization (WHO), Economic and Social Commission for Asia and the Pacific (ESCAP);

Officials of the State Government and Public Sector Undertakings deputed abroad on temporary assignments or posted to their branches or offices abroad.

Documents required for Resident Indians as well as for NRIs for getting Home Loans are different in some respect. Home loans for NRIs are available for purchase of old and new house/flats.

Last but not the least, NRIs should take due care while selecting their home loan provider companies or HFCs. Considering the geographical distances involved, it is significant that loan seekers associate with a proactive and responsive HFC.

NRI home loan FAQs

    1.  For what purposes can an NRI avail a home loan?

To purchase a house either ready-built, under construction or from a second owner, however he cannot secure a home loan for self construction of a property.

  1. What is the eligibility for obtaining NRI Home Loans?

The eligibility for an NRI is calculated on the same lines as a resident Indian.

Emphasis is placed on the following for an NRI:

  1. a) Qualifications – the NRI applicant has to be graduate
  1. b) Current job profile & past experience
  1. c) Probability of staying abroad for the entire loan tenure
  1. d) Probability of servicing the loan with an extended tenure in case you have to return to India.
  1. What is the repayment period for a NRI Home Loan?

The housing finance offered to NRIs normally does not exceed 5 years. However, some Housing Finance Companies offer loans for a term of 7 years. The repayment for the loan is by way of EMIs. The EMIs begin only after the entire loan is disbursed. In case of a part disbursement, you pay simple interest at the rate applicable on the loan amount that is disbursed to you.

  1. What is the mode of payment for NRI home loans?

The loan towards the home has to be paid upfront for the entire tenure of the loan by way of direct remittances from abroad through normal banking channels or from accounts that are allowed by RBI. Currently, payments are done through NRO, NRE, NRNR and FCNR accounts. These accounts change on the basis of RBI permissions to each HFC.

  1. What are the documents required for obtaining NRI Home Loans?

NRIs are required to submit additional documents than is normally required for a resident Indian.

  1. Duly filled & signed application NRI loan application form.
  2. One passport size photograph to be affixed on the application form & to be self attested by applicant &/ co-applicant.
  3. Copy of identify proof of both applicant &/ co-applicant. (Passport, pan card, driving license).
  4. Copy of residence proof of both Indian and overseas address of applicant&/co applicant. (Utility bill- electricity/telephone bill, lease agreement, passport, bank statement, letter from employer).
  5. Copy of visa stamped on the passport.( last visit details to be highlighted)*
  6. Copy of employment contract.
  7. Website address of the employer and contact details of HR Manager
  8. Copy of last 3 months salary slip/ original salary certificate.
  9. Bank statement of the overseas bank account for the last 6 months. (salary credits & rent paid to be highlighted)
  10. Bank Statement of the NRE/NRO account for the last 6 months.( in India)
  11. Profile of the applicant&/co applicant and qualification proofs
  12. Past occupational history (in case of less than 2 years of work experience or recent change in employment)
  13. Copy of Latest Income tax return (Form W 2 in US, P60 in UK)
  14. Details of any other loan availed from any other bank/financial institution in India or overseas.(to be mentioned on the application form)
  15. Bank statement showing repayment of the loans availed from any other bank/ financial institution for the last 6 months / repayment track record from the bank/ financial institution the loan has been availed from.
  16. Credit Bureau Report (incase facility not available in the country applicant&/ co applicant are based at than declaration to be collected mentioning details of any other loans availed)
  17. Processing fee cheque in favor of “HDFC LTD” from NRE/NRO account.
  18. Power of attorney details or local contact person’s details to be updated on the application form
  19. Incase property is selected, copy of property documents are also required. (please provide details such as complete property address, owners & payment made to the builder from own sources )

* Incase customer is permanent resident of the overseas country then permanent resident card will be required.

Note –

  • All the documents to be self attested.
  • If the documents are in language other than English an English translation of the same attested by the embassy should be provided.

Incase applicant/& co applicant is not present in India at the disbursement of the loan and POA has been identified then KYC documents of the applicant &/ co applicant to be attested by the notary public or Indian Embassy. Or customer can provide banker’s certificate from his bank on their letter head mentioning that applicant &/ co applicant are KYC complied with the bank.

  1. How is the loan reassessed if there is a change in status from Non-Resident Indian to Resident Indian?

The repayment capacity of the applicant(s) based on resident status is reassessed and a revised repayment schedule is worked out. The new rate of interest will be revised according to the rates for Resident Indian loans (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted. A confirmation letter on the status change is provided to the loan consumer.

Documents Required For NRI

  1. Dully filled & signed application NRI loan application form.
  2. One passport size photograph to be affixed on the application form & to be self attested by applicant &/ co-applicant.
  3. Copy of identify proof of both applicant &/ co-applicant. (Passport, pan card, driving license).
  4. Copy of residence proof of both Indian and overseas address of applicant&/coapplicant. (Utility bill- electricity/telephone bill, lease agreement, passport, bank statement, letter from employer).
  5. Copy of visa stamped on the passport.( last visit details to be highlighted)*
  6. Copy of employment contract.
  7. Website address of the employer and contact details of HR Manager
  8. Copy of last 3 months salary slip/ original salary certificate.
  9. Bank statement of the overseas bank account for the last 6 months. (salary credits & rent paid to be highlighted)
  10. Bank Statement of the NRE/NRO account for the last 6 months.( in India)
  11. Profile of the applicant&/coapplicant and qualification proofs
  12. Past occupational history (in case of less than 2 years of work experience or recent change in employment)
  13. Copy of Latest Income tax return (Form W 2 in US, P60 in UK)
  14. Details of any other loan availed from any other bank/financial institution in India or overseas.(to be mentioned on the application form)
  15. Bank statement showing repayment of the loans availed from any other bank/ financial institution for the last 6 months / repayment track record from the bank/ financial institution the loan has been availed from.
  16. Credit Bureau Report (incase facility not available in the country applicant&/ coapplicant are based at than declaration to be collected mentioning details of any other loans availed)
  17. Processing fee cheque in favour of “HDFC LTD” from NRE/NRO account.
  18. Power of attorney details or local contact person’s details to be updated on the application form
  19. Incase property is selected, copy of property documents are also required. (please provide details such as complete property address, owners & payment made to the builder from own sources )

* Incase customer is permanent resident of the overseas country then permanent resident card will be required.

Note –

  • All the documents to be self attested.
  • If the documents are in language other than English an English translation of the same attested by the embassy should be provided.
  • Incase applicant/& coapplicant is not present in India at the disbursement of the loan and POA has been identified then KYC documents of the applicant &/ coapplicant to be attested by the notary public or Indian Embassy. Or customer can provide banker’s certificate from his bank on their letter head mentioning that applicant &/ coapplicant are KYC complied with the bank.