NRIs have multiple investment rights in India, including the ability to invest in shares, bonds, mutual funds, and property.
But can an NRI take a loan against property (LAP) in India? Here’s what the country’s largest government bank, SBI, says about it.
SBI’s Rules for LAP for NRIs
According to SBI, NRIs can avail LAP in India, but the property being mortgaged must be in the name of the NRI.
Additionally, NRIs can also take a loan against property owned by their close family members.
The loan can be used for personal or business purposes but cannot be utilized for speculation.
Required Documents
ID Proof: Passport, OCI card, or PIO card.
Foreign Address Proof: Bank statement or utility bill.
Income Proof: Salary slips, bank statements, tax returns, etc.
Property Documents: Proof of property ownership, NOC, and No Encumbrance Certificate.
Power of Attorney (POA): A document authorizing a representative in India.
Key Factors for LAP Approval
Good Credit Score – A high credit score increases loan approval chances.
Low Debt-to-Income Ratio – Lower debt compared to income speeds up loan approval.
Stable Job & Reputed Employer – Working in a well-known company enhances loan eligibility.
Property Condition – Legally cleared, well-maintained property with insurance leads to quicker approval.
Benefits of LAP for NRIs
Lower Interest Rates – LAP usually comes with lower interest rates compared to personal loans.
Multiple Uses – The loan can be used for personal and business purposes.
Flexible Repayment Options – Various repayment plans are available.
Reduced Risk – The loan is secured against the property, lowering the risk for lenders.
How to Apply for LAP?
Before applying for a loan, compare different banks’ interest rates, fees, and terms. Keep necessary documents like ID proof, income proof, tax returns, and property documents ready.
You can apply online or offline. After submission, the bank will verify the documents, and upon approval, you will need to sign an agreement.
Once all formalities are completed, the loan amount will be disbursed to your account.
