Hey NRIs- Here is how to manage loan liabilities in India

Adhil Shetty BankBazaar.com

Dinesh, a non-resident-Indian (NRI) working in Dubai wanted to invest his hard earned money in India for a property. “I would have invested long back, but the slow process in India has been a damper” he told me. I realized that there are a lot of doubts for NRIs over the loans and loan procedures in India. So I decided to pen some tips for them who are looking to invest in India, but are sceptical about the rules and the way to manage liabilities in their homeland. With the advancement of technology, right from loan hunting to communication and loan processing is easy to manage now.

Tips to make your loan hunt easy:

Gone are the days you walked from bank to bank and sat with the executive to know their schemes and your loan eligibility. You can go online now, and make a comparison between the schemes offered by the banks of your choices, check your eligibility online and ask for a customized quote. You will get response immediately. So now you have zeroed down the bank.

If you still prefer the traditional way of visiting the branch, all leading banks now have branches in leading foreign cities where there are many Indians residing.

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Adhil Shetty

CEO|BankBazaar.com

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However, unlike resident Indians, there are some rules that you need to follow when opting for a home loan as an NRI. Home loans are available only for residential properties that are either under construction or ready to occupy. You can also avail loan for house construction on a self owned plot and for any possible alterations for any existing property. As a non resident Indian you are not allowed to purchase any agricultural land in India.

One rule that many NRIs are not aware of is the fact that they can buy only two properties in India. So before opting for a home loan as a non resident India, make sure you are applying for the right property while screening yourself.

Most banks are not offering personal loans for NRIs. For car loans, you need to have a guarantor for the loan in India.

Documentation process:

Making sure that you have all the relevant documents ready with you for applying makes the process easy and fast. This includes documents related to the property (for home loans) as well as your personal and employment related documents. For home loans, you need to have a Power of Attorney in India to sign the documents.

You need not plan a trip to India to apply for a loan. You can easily submit the documents with the bank branch in your country or file the application through an Indian relative, giving him the power of attorney to execute deeds on your behalf.

Loan disbursement:

Loan disbursements will be made to your NRE/NRO account by the bank. In case of flat purchases, the bank will disburse the amount in favour of the builder, as per the due dates mentioned in the construction agreement.

Managing loans repayments:

The repayment of your home loan or any loan you take as a Non Resident Indian must be made through your NRE or NRO account. You can give a standing instruction to the bank. You may not be able to subscribe to a mobile alert, but do ensure that you opt for email alerts to keep a tab on the EMI payments, interest rate changes and others.

Plan your part payments whenever you are in India, or else you can make an NEFT transfer or wire transfer to the home loan account.

Feeling left out? Tips to increase your communication quotient with the bank:

Gone are the days when getting in touch with a bank in India was a tough proposition. All banks now have a dedicated NRI helplines who are more than eager to help resolve all your doubts and queries for any loan or financial liability. It is a good idea to clear any doubts with the NRI cell of the relevant bank before opting for a loan.

Never turn off to newsletters of banks as many of them can be helpful to know about the latest schemes, offers and policy changes.