Loan Against Property For NRI

You must be familiar with the term LAP or Loan Against Property. You simply mortgage the property and a loan is given as a percentage of the property’s market value. The procedure for availing a loan against property for an NRI is not much different from any normal resident Indian citizen. He just needs to be the owner of the residential or commercial property.

Do banks sanction loan against property to NRIs? Yes, they definitely do and if you are an NRI, banks will easily sanction LAP if you meet the eligibility criteria. You need to be salaried and work for a reputed Organization. LAP is given to NRIs who work in selected countries. Banks sanction loans to salaried NRIs and PIOs (Person of Indian Origin).

Who is an NRI? An NRI is an Indian citizen who stays outside India for the purpose of a job or a business. A person is called a resident Indian if he/she stays in India for at least 182 days in a financial year or 365 days spread over four consecutive years. Otherwise he is an NRI. A person of Indian origin (PIO), is a foreign national of Indian origin. He/She could previously have held Indian citizenship or was born in India.

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Loan Against Property For NRI

1. How can an NRI avail LAP in India?

• Research: The first step in availing a loan against property is research. If you are an NRI, do your research and find the right bank to avail the loan. Check the interest rates, the amount of loan you can avail, the terms and conditions, the maximum tenure of the loan, repayment conditions and so on.
• Collect the necessary documents: Before sanctioning LAP, the bank will want to check your documents. Keep these documents ready, so that loan sanctioning is a hassle free process.

1. Identity and address proof: You need an identity and address proof like Passport, PAN, Driving License or the latest utility bill.

2. Income proof: The bank will want income proof to show salaries credited to your account. You will also have to furnish passport details along with the relevant visa stamps, the copy of your work permit or work visa, a document which supports your status as an NRI, the latest salary slips and overseas bank account statements. If you are self-employed, the bank will want to see your trade license, Profit and Loss account and the balance sheet, the income computation of the last 3 years which has been performed by a certified chartered accountant.

3. Income proof for salaried NRIs:

• You will have to submit a copy of your valid Indian passport showing visa stamps or a copy of the foreign passport.
• You will have to show a copy of the valid visa or work permit.
• Latest contract copy showing salary/salary certificate/wage slips.
• Your overseas bank account statement of the last 3 months showing salary credited to your account.
• NRE/NRO bank account statements of the last 3 months.
• You would also have to show the local bureau report of the country where you are based.

4. Income proof for NRIs working in the Merchant Navy:

• You will have to show the latest contract copy and if you are on home port for the last 6 months, then you have to show the future contract copy.
• You will have to show the latest continuous discharge certificate for an employment proof of 3 years, an identity proof like a passport, the primary bank account statements for the last 3 months, and the local bureau report of the country where you are based (This is if you are not based in India).

See Also: How To Get A Business Loan From A Bank?

2. Apply for the loan against property:

The final step is applying for the loan against property. You can apply for LAP online, or you can visit the bank in person and submit the necessary documents.

1. Important points on LAP for NRIs

• The loan to value ratio would be around 45-55% of the cost of the property. This means you get a loan up to 45-55% of the value of your property. Banks could sanctions loan up to 5 Crores.
• You (NRI) must have residential/commercial property in your name or in the name of your spouse, children, parents or siblings.
• The property must be insured against loss by fire, earthquake, floods and other natural calamities with the bank being the beneficiary under the insurance plan.

2. Repayment of LAP for NRIs

An NRI can make repayments using the NRE Account, NRO Account, inward remittances, liquidation of FCNR (Foreign Currency Non-Repatriable Account), a close relative’s bank account and money obtained from the sale of an immovable property based on which the loan was sanctioned.

See Also: BBMP Property Tax

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