Almost every bank in India, public or private, offers various types of loans to Non-Resident Indians, including personal loans. The Reserve Bank of India has specific guidelines for approving loans to NRIs. A personal loan is a  great source of financial assistance for people staying abroad. There are two types of loans that NRIs can apply for – one is a secured loan and the other is an unsecured one. In case of a secured loan, the NRI has to mortgage an asset – car, jewellery, or any high-value item. For an unsecured loan, the lending institution relies entirely on the borrowers for loan repayments because the borrower does not need to provide any collateral/security. NRIs come to India for a limited period or for an emergency. If they urgently need money in this period, personal loans are a viable option for them.

If you are an NRI, first consider various banks and their offers. As per the Reserve Bank of India’s directives, both private and nationalized banks have the liberty of fixing their own interest rates, depending on the loan amount and repayment tenure. As different banks offer different rates, you must find out the best deal for yourself. You will have to pay processing charges, service charges, and other charges while applying for the loan. Most banks ask for collateral to grant a personal loan. You may also have to submit various documents to process the loan and get it approved.

Most personal loans take almost two weeks to process. Thus, you must have that much time in hand while applying for such a loan. The documents that you typically need to produce are:

  • A copy of your passport and visa.
  • Job details: i.e., the country, place of work, name of the company, date of joining, salary, and designation.
  • A record of all your transactions in the last six months, including your domestic (NRO/FCNR/NRE) and international bank statements.
  • If you submit the application from outside India, then you have to provide a Power of Attorney attested by the Indian Consulate in your country of residence. If the applicant is present in India, then the Power of Attorney can be submitted as a form of a notary (UNCLEAR).
  • For authenticating your loan credibility, you will have to submit your appointment letter and your job contract.
  • If you are staying in any Middle Eastern countries, then you will need additional documentation –  an identity card/labour card (in English) and a confirming signature of the authorized officer of the relevant consulate.
  • If you are staying in any Middle Eastern countries, then you will need additional documentation –  an identity card/labour card (in English) and a confirming signature of the authorized officer of the relevant consulate.
  • If you are working in the Merchant Navy, you will have to provide a copy of your contract, income proof, among other documents.

These are the primary requirements of applying for a loan. Personal loans for NRIs is not a big deal nowadays. With centralised data-exchange systems, institutions can verify all necessary details quite easily. Repayment modes vary and your bank will offer you different options for repaying your loan.

 

Disclaimer: This Article is for information purpose only. The views expressed in this Article are personal and do not necessarily constitute the views of Kotak Mahindra Bank Ltd. and its employees

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