Can a USA based NRI buy a home loan in India


Home loans can be taken by any individual engaged in any legal work wherein the individual earns a sufficient amount of money for the livelihood and becomes eligible for the repayment of the home loans. The person can either be an employee or else self-employed who can take the loans. The self-employed include qualified professionals like doctors, architects, charted accountants working as auditors, or tuition teachers or owners of a coaching institute. And the un-professional ones include shopkeepers, restaurant owners, contractors, or estate agents. Self-employed persons are most likely to hide their incomes, due to which the loans may get rejected. The loan applicant must disclose their proper income in case of becoming eligible for the home loans. The purchase of a home and availing of home loans for the same is a major decision for an individual. Thus the banks are cautious while extending the loans to the borrowers as the loans extended by the bank or an NBFC should not turn into bad debt. The rising NPA, i.e., non-performing assets, is a big problem for the bank; also, during the Covid times, banks have faced a major challenge to recover the loans.

An NRI can buy the property in India on loans being taken by the Indian bank or an NBFC. The loan applicant should be clear and transparent in disclosing documents and income, which is a mandatory criterion. Also, the loan applicant should be able to furnish all the necessary documents, which are mandatory. Also, as per the RBI mandate, the borrower must file income tax returns. The people who hide their income and do not pay taxes are not eligible for availing of home loans. Thus filing of the income tax returns is necessary. Banks are more cautious about extending the loans to the entrepreneurs as the chances of default are high. Thus having a stable and consistent income is necessary for an individual while availing of loans. Also, the business should be highly profitable, and the loan applicant should be able to present the same on paper before getting the home loan approved. An NRI can get loans on similar conditions to the ones in India. There can be a very slight difference in the interest rates being charged to the NRI’s than that of the local ones. The borrower can transfer the money through remittances in an Indian bank for the payment of the loans EMI.

Information about Home loans for the NRI in India

  • An NRI can buy the loans and the property in India even while staying in the USA. The NRI people find it easy the purchase the property in India as the value of the money in case of the rupee against the dollar is very low. And thus it is very much affordable for the US-based NRI to buy the properties in India at comparatively low rates compared to the USA and also the income earned abroad by the NRI’s is much higher than that of the employees working in India.
  • An NRI can get approved the loans based on the income earned abroad which decides the eligibility of the borrower for the loans. The EMI calculator can be used by the borrower to check for the eligibility of the loans by converting the income earned abroad into rupees and then the eligibility can be checked.
  • An NRI can get the loans at interest rates of 6.50%-9% per annum. Thus the interest rates are quite affordable for the borrower on the home loans.
  • The increase in the property prices is much higher than the western countries so thus the investor amongst the NRI from the US can benefit easily from the investment done in India.
  • The NRI can save on tax benefits as well in case of the income earned in India and thus can save money on the income tax rebate under section 80C or section 24.
  • An NRI requires documents like income proof/salary slip, passport with the VISA printed with validity and also employment proof, international residence proof.

The answer is yes that the borrower based in the USA can invest in India and also take the loans from any of the banks which are based in India. Loans can be taken at more or less similar interest rates in India by the NRI at which the Indian borrower can take the loans. Loans are disbursed after the proper verification of the documents and income proof for the loans.

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