Indian roads are on the verge of transformation in time, from bullock carts, cycles, bikes to the four wheeled comfort version called cars. It is estimated that on an average, 200 to 300 cars get registered per city every day in important cities of our nation. With this being the trend a person who is working abroad may want to buy a car for his parent/relative or may even want it for his own use when he visits India. Banks have provided a ready-made solution to this situation by providing the NRIs with a car loan.
Features of NRI car loans:-
Borrower and guarantor: Car loans provided to NRI is purchased in the name of a parent/relative who is a resident citizen of India. The NRI here is the guarantor for loan in the name of his relative who is the borrower.
Loan period: The time taken for repayment of NRI car loan ranges from 1 year to 7 years depending on the bank. The loan amount along with interest rate is divided into Equated Monthly Installments that the Non Resident Indian is payable to the bank.
Loan amount and range: The amount of loan provided by the bank depends on factors like income of the NRI, price of the car etc. Few banks provide car loans to used cars too and in this case the amount provided will be quite higher compared to new cars but the loan is subjected to other terms and conditions.
Securities: Car loans to NRI are provided against security. Hypothecation of documents of car like registration certificate, documents of equitable property, loan track record with the bank etc can work as a security to car loan.
Interest rate: Interest rate on NRI car loans comes under the basic guidelines of RBI and hence can get updated with time. Currently the interest rate on NRI car loans is approximately 12.25%. This interest rate can vary from bank to bank.
Fees and charges: The loan provider imposes a fee for processing the loan and this fee varies from bank to bank. Typically these charges of a car loan may come up to 0.5% of the loan amount.
Repayment of loan: The loan can be repaid through inward remittances from NRE/NRO/FCNR accounts or other money transfer methods. A relative of an NRI can also make the repayment through local bank accounts.
Other factors: The relationship of guarantor with the borrower, minimum and maximum age of both guarantor and borrower, physical status of the borrower (health condition) can be the other factors of an NRI car loan provided by a bank in India.
Documents required for NRI car loans:
Proof of identity of guarantor and borrower (PAN card, Passport etc)
Proof of residence of guarantor and borrower
Salary certificates of guarantor or bank statements from accounts of banks abroad
Employment certificate or work permit of guarantor
Photographs of guarantor and borrower
The documents mentioned above are required by a bank in general and depending on the bank there may be other specific documents required for an NRI car loan.
Non Resident Indian car loan providers:-
A matter of time and work for an NRI, somewhere in one part of the globe can turn into ease of travel, and comfort on the road to his kin in India through NRI car loans.
Established in 1985 by Mr.Chandra Shekar Shetty, operating from 3 branches, B.C.Shetty & Co. is a firm dedicated to serving their clients with utmost transperancy by offering qualitative professional service.
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