Car Loans for NRIs
Many NRIs conduct frequent visits to India. Furthermore, many NRIs also prefer to have their own car in India when they come to visit their relatives or to travel. Due to this, the Government of India allows banks to offer car loans to NRIs, but with a specific set of conditions. If you are an NRI willing to purchase a car in India, you should refer to these conditions before getting a Car Loan:
Most banks require NRIs to have an Indian guarantor while applying for a loan. An NRI can make the repayment by using an NRI account (NRE/FCNR(B)/NRO bank accounts) or the amount of the Car Loan can be paid through remittances. Additionally, there is also a condition that the age of both the NRI and the guarantor will have to be between 21 and 65.
Other than having a guarantor while applying for the loan, there are other conditions prescribed by different lenders while providing an NRI loan for a Car:
He/she should have at least a relationship of 3-5 years with the bank
The country of residence should be included in the list of countries approved by the bank
Income of the NRI should not be less than USD 1000 p.m. or USD 12,000 p.a.
He/she should have a valid Indian passport
He/she should have a work permit for the resident country
He/she should be employed for at least two years in the resident country
While there are many rules and regulations in the process of availing Car Loans by NRIs, there are also many benefits provided to them:
Documents related to the loan application can be submitted in India, overseas, or through an online portal
The tenure available in NRI Loans is of 5-7 years
The interest rate of NRI car loans is the same as a normal car loan in India
The Loan-to-Value (LTV) ratio provided by Banks to NRIs is 85-100%
The rules regarding NRI car loans prescribe that the loan should paid by remittances through acceptable banking channels or through the money deposited in his/her NRE/FCNR(B)/NRO bank accounts. However, the RBI has also allowed close relatives of NRIs to pay the loan amount on behalf of the NRI citizen.