Loan Guides for NRIs – How to Get a Car Loan in India?
Let’s consider the Case of Person A, who is working in Qatar. He wants to gift a car to his parents back home but doesn’t have the sufficient funds to pay for it fully. What do you think, he can do?
Well, if you are an NRI and facing a similar situation, then there’s reason to cheer. A few Indian banks and other NBFCs have begun offering car finance for NRI. Some of the popular banks that offer loans in this category are State Bank of India, Federal Bank Ltd, State Bank of Travancore and many others.
Reasons for Increase in Popularity of NRI Car Loans
- The aspiration to own a luxury vehicle back home to accommodate their travel during visits back home
- As a gift to aging parents or spouses living in India
However, getting a vehicle loan in India as an NRI has a few restrictions. Check out the limitations and how to prepare for them, here in this article.
You may not be able to buy the vehicle in your name
For instance, if you avail an auto loan from SBI, then you can’t register the vehicle under your name. Rather you act as the guarantor for the loan. Regular guarantors need not bear the EMI of the loan. However, it’s the NRI guarantors who’ll have to pay the EMIs. You’ll have to fund the EMI from your NRO or NRE account.
In whose name can you register the Vehicle?
The eligibility criteria fixed by most banks is that both the co-applicant and the NRI guarantor should be between 21 and 65 years. Also, you have to include the person under whose name you are buying the vehicle as co-applicant in the loan forms.
Existing Customers have an Advantage
Most banks generally offer car loans only for existing NRI customers. This is because banks have a good relationship with them and believe that they’re unlikely to default on their payments. So always approach your Indian bank first when applying for car loans.
Country of Residence
Different banks have a varying list of countries that they approve for auto finance. Generally, countries like the US, Singapore, Malaysia, the UK and West Asian countries are on the list of all banks.
Main Features of NRI Car Loans
- Documentation – You must submit the documents either online or submit it via your co-applicant. You can also submit it at the local branch of your Indian bank in your resident country.
- Amount Sanctioned – This one varies from bank to bank. Approach your bank for the exact details. Most banks generally sanction around 85-90% of the ex-showroom price of the vehicle.
- Tenure – The tenure varies anywhere from five to seven years from the day you purchase the vehicle.
- Interest Rate – The interest charged for loans on cars for NRIs is the same as that for resident Indians.
- Repayment of the Loan – Repayment is possible only through remittance via regular banking channels outside India or NRE or NRO accounts. Recently, RBI has approved resident Indian relatives to repay the loan on behalf of their NRI brethren.
Factors to Consider
Before you decide to apply for a car loan in India, check out if it’s easier/cheaper borrowing the amount in your resident country. Comparing the interest rate and other transaction charges on www.antworksmoney.com will give you a fair idea. You can then choose the one that works the best for you.
