India is a prime destination for investment in real estate. Whether you wish to live here after returning from a foreign country or invest in a property to reap rich dividends, India can offer you plenty of options.
An NRI home loan is the best option to get the cash needed to purchase a property. NRI home loans come with attractive interest rates, a simple application process, minimal documentation and flexible repayment options. Additionally, lenders offer various discounts and special offers to make the deal sweeter during the festive season.
Read on to discover the top-4 things you should consider while availing an NRI home loan.
An NRI home loan calculator can give you an accurate estimate of the amount you need to pay as the EMI. But, before doing so, you must ensure that you are eligible for the loan. Generally, lenders prefer getting loan applications from people holding a valid Indian passport. You must either be an Indian citizen or Person of Indian Origin (PIO). Additionally, you must have a work experience of one year and more; although this rule does not apply for people on deputation. Finally, the minimum age of NRI home loan application is 21, and the maximum age is 70 (on maturity).
Even after fulfilling the basic criteria mentioned above, there may be occasions when an NRI home loan application gets rejected. Home loan approvals depend on many factors, including credit score, job profile, monthly income, Credit Utilisation Ratio, etc. It is wise to fetch your credit score and the corresponding report well before you apply for an NRI home loan. Doing so can enable you to take the necessary steps to improve the score. Generally, the higher your credit score is above 750, the lower will be the NRI home loan interest rates.
Loan Term and EMIs
Generally, Indian lenders offer up to fifteen years for repayment (in the case of a home purchase or construction) and up to ten years (for home improvement). You may calculate the exact EMI by entering the loan details on an NRI home loan calculator. Interestingly, the lower term you choose, the lower will be the interest rate, and the higher the EMI amount. While paying off a higher amount may not seem challenging now, it may appear to be tough after a few years. Hence, carefully evaluate your future income potential before choosing the right NRI home loan term.
Loan value, or loan-to-value ratio, is the amount you can get proportionate to your construction or purchase cost. Generally, you can get a loan amount of up to 80% of the property’s market value, if the amount is below INR 75 lacs. In case the amount is above INR 75 lacs, you can get an LTV of 75%. It is prudent to remember that the higher your loan amount, the higher will be the financial burden. Hence, try paying a bit more as a downpayment to reduce your NRI home loan liabilities.
When you have an NRI home loan by your side, your dream of investing in the booming Indian real estate sector cannot be far away. With interest rates starting from an all-time low of 9.25%, now is the best time to use the NRI home loan calculator and apply for the loan online.