Can NRI guarantee home loan to relative?

NRIs (non-resident Indians) find the Indian real estate industry to be appealing. Because it is simpler to pay and receive money in Indian rupees and to earn money in a major currency. There are some examples where an NRI can guarantee a home loan to a relative and it has some conditions as well. So you must continue reading to know if can NRI guarantee home loan to relative and what are the conditions.

Can NRI guarantee for home loan?

Yes, an Indian citizen can take a home loan scheme with NRI guarantee from an NRI under the Foreign Exchange Management Regulations, 2000. It is approved by the RBI on May 3, 2000, with the direction of borrowing and lending transactions in the Indian Rupee. It is between persons residing in India and non-resident Indians. It is issued by the Reserve Bank of India on January 1, 2016. However, there are limitations. You can borrow money from an NRI on a repatriable or non-repatriable basis if you're a resident Indian or have a business established in India. The Ministry of Finance and the Reserve Bank of India control the borrowing and lending between Indian citizens and non-Indian citizens.

What things to keep in mind while taking a loan from NRI?

• A maximum of three years may not pass after the loan is granted.

• Such loans have a fixed interest rate. On the day when the loan is granted, the interest rate shall not be over 2% above the applicable bank rate.

• Only the NRI's NRO account may be used to remit principal and interest payments.

• You must use a non-repatriation basis for all borrowing. As a result, money that has already been disbursed cannot be returned.

• Only two options exist for borrowing money. First, a loan can be disbursed to an Indian resident by debiting the NRI's NRE/NRO/FCNR account. Cash transfers from outside of India are the second method.

• Any project involving civil development or exporting outside of India may be funded by a loan from a bank outside of India by an Indian resident.

Can NRI guarantee home loan to relative must be clear to you.