NRI Home Loan FAQs

Banks provide loans for Purchase, Construction, Extending an existing home, Renovation, or for purchase of a plot of land from Development Authorities.

What are the documents that need to be submitted along with the application?

The following documents are to be submitted along with the application:

• Photocopy of the Employment Contract or Labour Contract and English translation duly countersigned by your employer
• Latest salary certificate (in English) specifying the following:
a . Name (as it appears in the passport).
b . Date of joining.
c . Passport Number.
d . Designation.
e . Perquisites and salary
• Photocopy of Identity card / Labour card
• Photocopy of valid resident visa stamped on the passport
• Photocopy of monthly statement of local bank account for the last 4 months
• Property related documents

What security will I have to provide?

The security for the loan is first mortgage of the property to be financed, by way of deposit of title deeds and/or such other collateral security as may be necessary. The documents need to be submitted in India to the bank that is disbursing the loan.

In addition interim security may be required, if the property is under construction. Collateral or interim security could be in the form of assignment of life insurance policies, the surrender value of which is at least equal to the loan amount, pledge of shares and such other investments that are acceptable to the bank.

Please ensure that the title to the property is clear, marketable and free from encumbrance. To elaborate, there should not be any existing mortgage, loan or litigation, which is likely to affect the title to the property adversely.

Do I have to register the sale agreement?

In many states in India, the Agreement for Sale between the builder and purchaser is required by law to be registered. You are advised, in your own interest to lodge the Agreement for registration within four months of the date of the Agreement at the office of the Sub-Registrar appointed by the State Government, under the Indian Registration Act, 1908.

Who can be co-applicants?

All owners need to be co-applicants to the loan. However, all co-applicants need not be co-owners.

Do I need to be physically present to avail a loan?

No, the power of attorney (POA) can apply and carry out the formalities on your behalf.

Can I give a Power of Attorney in favour of a person of my choice in India to complete loan formalities on my behalf?

Yes. It would be desirable to appoint a Power of Attorney in India and the POA should be a resident of the city where you wish to apply for a home loan. In case the co-applicant is not present in India to complete the loan formalities, the co-applicant should also draw a power of attorney favouring the person of choice in India.

How will the bank decide my loan eligibility?

Repayment capacity takes into consideration factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history. And, of course, HDFC's main concern is to make sure you can comfortably repay the loan amount.

What is an EMI?

You repay the loan in Equated Monthly installments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement. Please refer to the EMI Calculator for further details.

What is pre-EMI interest?

Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement upto the date of commencement of EMI.

How do I make the payment?

You can pay the EMI, pre-EMI interest or other charges through cheques favouring HDFC Ltd., from your NRE/ FCNR/ NRO/ NRSR account in India.

Clearance of arrears by defaulters

An NRI who is not repaying the loan regularly, may subsequently opt to clear the outstanding loan through direct remittances from abroad through normal banking channels, from the Non-Resident (External) account in India or through Non-Resident (Ordinary)/ Non-Resident Special Rupee account /cash (withdrawn from Non-Resident (Ordinary)/ Non-Resident Special Rupee account).

What is meant by "Own Contribution"? Is it necessary that the own contribution have to be paid through the NRE account?

Own Contribution is the cost of the dwelling unit financed less the loan amount. The own contribution should be met from direct remittances from abroad through normal banking channels or from the Non-Resident (External) Account/Non-Resident (Ordinary) or the Non-Resident Special Rupee account in India. The own contribution must be completed to enable the bank to disburse the loan amount.

How is my loan reassessed if there is a change in status from Non-Resident Indian to Resident Indian?

The repayment capacity of the applicant(s) based on Resident status is reassessed and a revised repayment schedule worked out. The new rate of interest will be as per the applicable rate on Resident Indian loans at the time of conversion (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted.

Who classifies as a Person of Indian Origin (PIO)?

An individual classifies as a PIO if

• Photocopy of the Employment Contract or Labour Contract and English translation duly countersigned by your employer
• He at any time held an Indian passport.
• He/ either of his parents/ either of his grandparents was a citizen of India.
• The person is a spouse of an Indian citizen.

A Person of Indian origin can be a citizen of any country (other than Bangladesh or Pakistan)

Does a bank finance a PIO holding foreign passport?

Yes. As per current guidelines of the Reserve Bank of India, persons of Indian origin holding foreign passports are eligible for loans from Indian Banks.

What loans is a PIO eligible for?

A PIO can avail loans for home purchase and home extension.

What documents would be required to prove my PIO eligibility?

• Photocopy of the Employment Contract or Labour Contract and English translation duly countersigned by your employer
• A photocopy of the PIO card OR
• photocopy of current passport indicating birthplace as 'India'.
• A photocopy of Indian passport, if held by the individual earlier.
• A photocopy of parents/grand parents Indian passport/ birth certificate/ marriage certificate.

Are there any special terms and conditions for a loan to a PIO?

All other terms and conditions relating to rate of interest, term of loan, fees, appraisal norms, own contribution, remittances and repayment of loan remain the same as those for loans to NRIs.

What is a PIO card?

A PIO card is issued to a "Person of Indian Origin ", by the "Indian mission" (Embassy of India / High Commission of India / Indian Consulate in a foreign country. It extends to the cardholder certain facilities, as prescribed by the Ministry of External Affairs, and is valid for a period of 20 years.

Do I have to have a PIO card for the loan?

It is not mandatory for a person of Indian origin to have a PIO card issued in the customer's name, to apply for the loan.

Are these policies subject to change?

Yes. These policies will be reviewed periodically.