How can a NRI take a car loan?

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 How can a NRI take a car loan?
NRI's who visit the country often would like to keep a car in handy, but, may not have the funds to make an outright purchase.

It's pretty complicated, if you are an NRI and wish to take a car loan. Norms vary from bank to bank, and it's not going to be easy.

State Bank of India (SBI) for example will treat the NRI as a guarantor for a car loan, while the applicant should be a resident Indian. This clearly means that the loan has to be taken by a individual who is a resident Indian and the car would then have to be registered in the resident's name. Interestingly, SBI specifies that the loan must be re-paid before the guarantor turns 65.

State Bank of Travancore is much easier in terms of car loans. The bank will fund your purchases for NRIs or spouse of NRIs who have regular Net Annual Income (NAI) of not less than Rs 2,50,000. The loan amount would be approximately 4 times your net annual income. The loans would have to be paid from a NRE/NRO account.

Federal Bank has a very popular NRI car loan scheme. Of course, the Bank's bulwark remains it's NRI customers. The interest rates charged by the bank are same as that for resident Indians.

There are many banks that do not have specific car loans for NRIs and in such cases you could buy the car in a family members name.

Many banks insist on the NRI being a customer of the bank for a few years at the very least. The interest rates on a car loan being availed by a NRI is the same as that for a resident Indian.

Read more about: nris, sbi
Story first published: Friday, April 19, 2013, 11:46 [IST]
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