Car loan for NRIs
Indian citizens who reside abroad and is a salaried professional or self-employed in his country of residence qualifies as an NRI and is eligible to apply for NRI car loans. The tendency to buy high-end cars and frequent visits to the country are the two main reasons why the demand of cars loans among NRIs is increasing Read on to know more about eligibility, required documents, terms, and conditions to obtain a car loan.
NRI Car Loan Eligibility
The following are the common eligibility criteria laid down by most of the banks.
- The NRI must have an Indian resident as a co-applicant or a guarantor.
- The age for both applicants and guarantors should be at least 21 to 65 years old.
- The loan must be repaid before the applicant turns 65 years of age.
- The applicant should be employed abroad for at least 2 years.
- Maintains an NRI account with the bank for at least twelve months with a minimum average balance of Rs. 50,000.
- Should have a minimum Net Monthly Income of USD 1000 or a minimum Net Annual Income of USD 12000.
Documentation Required for an NRI Car Loan
- Must possess a valid Indian passport
- Proof of a steady source of income
- Holds a valid job contract or work permit
- Has an NRI account with the bank
Features and Benefits of NRI Car Loans
Minimal documentation: The documents required are minimal. You can submit all the required documents at the branch of the bank in your residing country, or it can be sent online or through your co-applicant.
Amount of loan: The maximum loan amount that can be availed by NRIs for buying a car is calculated on factors such as the NRIs income, repaying capacity, and the cost of the car. However, the amount eligible could be 18 times more than the applicant's income.
Loan to value (LTV): LTV is the ratio of the loan amount that can be borrowed from the bank to the actual value of the car or its ex-showroom price. Most of the banks offer 85-100% of the ex-showroom price as a loan.
Tenure: The loan tenure ranges between 5 to 7 years, from the date of purchase of the car.
Interest rate and other charges: The interest rate and other charges for NRI car loans are the same as offered to the resident Indians.
Repayment: The loan repayment can be done via remittance through normal banking channels, remittance received from outside India, non-resident external accounts or out of income earned from a property in India. Resident Indians can repay their car loans on behalf of their NRI relatives.
Zero repayment Penalty: There is no prepayment penalty charged by the bank if the loan is repaid before maturity.
