Indian Overseas Bank NRI Home Loan

Indian Overseas Bank (IOB) NRI Home Loans

NRIs An Introduction

Hundreds of Indians immigrate to different countries each year for work, higher studies or business opportunities. This migration has led to thousands of families located in North America, Europe and Middle East.

Coined as NRI (Non-Resident Indians) are people who have an Indian passport and are living abroad for a long time (more than a year) for work, studies or other legal purpose. According to FEMA an NRI is “who resides outside India for employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period”. It also mentions that any Indian who hasn’t lived in India for more than 182 days during that financial year he/she is considered an NRI.

It is to these people that banks like IOB provide home loans at competitive and exclusive interest rates.

IOB NRI Home Loan

An NRI home loan will follow the same structure as a normal home loan with the loans being repaid in Equated Monthly Instalments (EMI). The difference arises in the interest rate and tenure, where the interest rate for NRIs is slightly higher and the loan tenure is lower than compared to home loans provided to Indian residents.

The NRI home loans have lower tenure as the borrowers earn a handsome income which indicates a higher repaying capability. Moreover, most of the NRI borrowers wish to close the loan at the earliest.

Benefits of IOB NRI Home Loans

• Attractive interest rates on a monthly reducing basis.
• Low processing fee
• Repayment up to 15 years
• Up to 80% of cost of the property as loan amount

IOB NRI Home Loans Eligibility Criteria

The NRI home loan is offered to people who have been living outside India whose loan tenure, loan amount sanctioned, and interest rate will depend on the customer’s profile, age of customer at maturity of loan, age of property at loan maturity, depending upon the specific repayment scheme as may be opted and any other terms which may be applicable based on prevalent norms of IOB.

Residential Status: An NRI/PIO who has an Indian passport for any country except Pakistan and Bangladesh

The applicant should have minimum monthly salary of INR 10,000

The applicant who owns a house in his/her name or in the name of the spouse or children

Fees and charges for IOB NRI Home Loan

Loan Amount: There is no cap fixed on IOB NRI home loan amount. The borrowers can get more than INR 500 crores as home loan amount. Maximum of 80% of cost of the house is given as loan amount.

Repayment Tenure: For the purchase and construction of property, the borrower can repay the loan within 15 years and for repair and construction, the loan can be repaid in 5 years.

Holiday Period: For construction, the repayment begins only after a year, the borrower can enjoy 12 months of holiday period. For property acquisition, the holiday period is up to 6 months and for repair and renovation, the holiday period is up to 3 months.

Documents Required for IOB NRI Home Loan

The following are the documents required to apply for the NRI Home Loans

List of papers/ documents applicable to all applicants:

• Employer Identity Card
• Attested copy of valid Passport and visa.
• Address proof mentioning the current overseas address
• Copy of Continuous Discharge Certificate (CDC)-for applicants employed in the merchant navy.
• PIO Card issued by Government of India. (in case of PIOs)
• The attestation of documents may be done by FOs/Rep. Offices or Indian Embassy/Consulate or Overseas Notary Public or officials of Branch/Sourcing outfits based in India.
• Loan Application: Completed loan application form duly filled with 3 Passport size photographs
• Proof of Identity (Any one): PAN/ Passport/ Driver’s License/ Voter ID card
• Proof of Residence/ Address (Any one): Recent copy of Telephone Bill/ Electricity Bill/Water Bill/ Piped Gas Bill or copy of Passport/ Driving License/ Aadhar Card

Property Papers:

• Permission for construction (where applicable)
• Registered Agreement for Sale (only for Maharashtra)/Allotment Letter/Stamped Agreement for Sale
• Occupancy Certificate (in case of ready to move property)
• Share Certificate (only for Maharashtra), Maintenance Bill, Electricity Bill, property tax receipt
• Approved Plan copy (Xerox Blueprint) & Registered Development agreement of the builder, Conveyance Deed (For New Property)
• Payment Receipts or bank A/C statement showing all the payments made to Builder/Seller
• Account Statement: Bank account details for the previous 6 months overseas account showing salary and savings and Indian account if any.
• If any previous loan from other Banks/Lenders, then Loan A/C statement for last 1 year

Income Proof for Salaried Applicant/ Co-applicant/ Guarantor:

• Valid work permit
• Employment contract - an English translation duly attested by employer/ consulate / our foreign office / Embassy in case it is in any other language
• Last three months’ salary certificate/slip
• Last six months’ Bank Statement showing salary credit
• Latest salary certificate /slip in original and copy of identity card issued by the current employer
• Duly acknowledged copy of last year Individual Tax Return except for NRIs/PIOs located in Middle East countries and employees in the Merchant Navy.

Income Proof for Non-Salaried Applicant/ Co-applicant/ Guarantor:

• Business address proof
• Proof of income in case of self-employed professionals/businessmen.
• Last 2 years Audited/C.A. certified Balance Sheet and P&L accounts,
• Last 2 years Individual Tax Return except for NRI/PIO located in Middle east countries
• Last six months’ Bank Statement of overseas account in the name of individual as well as company/unit.

Loan Repayment

As per RBI rules Repayment must be done in rupees through an account in the India or utilizing NRE or NRO accounts. If the property is rented out the rent receipt can be used against the Equated Monthly Instalments (EMI)

Tax benefits

As with resident Indians NRIs can also avail tax benefits on home loans under section 24 and 80c. NRIs can get tax exemption on the interest paid for a maximum of Rs. 2,00,000 and Rs.1,50,000 on the principle paid under section 80c. If it is a joint loan taken with another NRI or resident Indian/s then each member can avail for the tax benefits separately.

Restrictions in property owned

The Government of India has stipulated that an NRI can only own 2 houses in India. That is, they can own only 2 properties for residential purposes. Even if the properties are rented out they can only own two. They can own any number of commercial properties while they cannot own land for agriculture.

IOB Home Loan EMI Calculator

To know how much you will have to pay as EMI on IOB home loan, you can visit the official website of the bank. Go to ‘Tools and Calculators’ page where you will find the option for ‘Home Loan EMI Calculator’. After entering the page, you will find three fields where you need to enter the following details: 1) Loan Amount, 2) Interest Rate and 3) Tenure in years.

After entering the necessary details, the calculator automatically calculates the loan EMI amount to be paid and delivers the result on the same page. It takes less than a minute to check the EMI amount against the home loan to be taken.

You can also view a similar home loan EMI calculator on CreditMantri website and apply for the loan directly. You will find the results of total amount payable with interest and interest payable separately.

IOB NRI Home Loan FAQ

1. What is the maximum loan amount that I can get through NRI Home Loan?

A person can get maximum 90% funding if the loan amount is Rs.30 lakhs, 80% up to Rs.75 lakhs and 75% for loan amounts above Rs.75 lakhs.

2. How can I repay the NRI home loan EMI each month?

As per RBI rules Repayment must be done in rupees through an account in the India or utilizing NRE or NRO accounts. If the property is rented out the rent receipt can be used against the Equated Monthly Instalments (EMI).

3. Are there any penal charges for Bank NRI Home Loans?

Yes, if you miss payments there is a penal charge that is levied in accordance with bank policy.

4. What is the maximum loan tenure that I can get?

The maximum Loan tenure that you can get from IOB NRI home loans is 15 years.