Personal loans are fast becoming popular. Whether you want to take a holiday or a new piece of jewelry, you are not required to take the money out of your retirement fund. You can finance these purchases and many more by simply taking out the personal loans. All the major banks and financial institutes now offer personal loans on very easy terms and conditions. The process is generally even easier for the existing clients. In most of the cases, the formalities for the disbursal of loans are completed within a day or two and you are all set for your dream vacation or bling.
Personal loans can come to your rescue whether you live in the country or not. Various banks now offer NRI personal loans, which are targeted at the Indians residing abroad. These loans are available in two different modes.
Secured Loans:
As the name implies, these loans are made on the back of collateral. The collateral or the security can be any asset depending on the various variables of the loan contract as well as on the discretion of the lending institutions. Generally, home or car or any other valuable asset is considered to be eligible for collateral purposes.
Unsecured Loans:
Unlike secured loans, unsecured loans are disbursed after scrutinizing various documents to establish creditworthiness. No collateral is required for these loans. The documents which are generally used for this purpose may include pay slip or income tax return.NRI personal loans may be taken to fulfill various obligations including unscheduled international travel.
It should be noted that NRI personal loan is available only in the secured loans. Since in the case of non residents, it is difficult and time consuming to establish the creditworthiness of the borrower. For the purpose of obtaining the personal loan, the applicant will be required to pledge any asset or property as security.
The second step in the process of obtaining NRI personal loan requires the submission of required documents. These documents need to be scrutinized before the decision to grant the loan is taken. It is important that proper documents are filed as any shortcoming in the documents can cause delay in the disbursal of loan. In some cases, it may even lead to the rejection of the application. It should also be ensured that the information provided in these documents is correct as any wrong information can have severe repercussions.
List of Documents required
Following is the list of documents required for applying for the NRI personal loans:
- Salary certificate. This certificate should be in English and should clearly state the name of the borrower, designation, date of joining and complete compensation details.
- A copy of appointment letter along with the relevant contract.
- Copy of translated labor card or identity card. This is relevant for the applicants working in the Middle East.
- A copy of CDC. This requirement is only applicable if the applicant is in the merchant navy.
- Bank statements for the past six months.
- Power of Attorney. If the borrower is currently in India, then the Power of Attorney is required to notarized. If the borrower is outside of India, then the PoA needs to bte attested by the Indian consulate in the residence country.
- A copy of passport and visa.
Above is the list of documents generally required by most of the banks. Different banks may require additional documents. Similarly, eligible criterions may also differ from bank to bank. However, following are the standards generally followed by the banks.
For Self Employed Borrower:
- Minimum and Maximum Age: Most of the banks require the borrower to be at least 24 years old, while the borrower’s age at the time of the maturity of the loan should not be more than 65 years.
- Net Profit: The business should be making minimum annual net profit of Rs. 2 Lacs.
For Salaried Employees:
- Minimum and Maximum Age: The minimum age for the applicant is set at 21 years. The age of the borrower at the time of maturity of the loan should not be more than 58 years.
- Income: The borrower should have minimum monthly income of Rs. 15,000.
While taking a personal loan, the borrower should pay attention to various factors. These factors are generally common with all the other loans. The borrower should pay attention to various charges such as processing fee to ensure that these charges are not excessive. Attention should also be paid to the rate of interest and to the tenure of the loan as well. The borrower should be careful that they are able to meet the EMI obligation arising out of the loan. Personal loans are easily available. However, the loans should not be taken for meeting frivolous expenses as these loans generally come with high interest rate.
