Canara Bank NRI Home Loan : Interest Rates to Application Process everything you need to know

Canara Bank NRI Home Loans: Your Pathway to Property Ownership in India
November 16, 2023
6
min read
canara_bank_nri_home_loan_guide

Are you an NRI (Non-Resident Indian) dreaming of owning a piece of your homeland? Well, Canara Bank is here to make that dream a reality. With its dedicated NRI home loan schemes, Canara Bank allows you to invest in property right from the comfort of your foreign residence. Let's explore the varied offerings and find out why Canara Bank might be the best choice for your NRI home loan needs.

Types of Canara Bank NRI Home Loans

Canara Bank offers an array of home loan products exclusively tailored for NRIs and PIOs (Persons of Indian Origin). Here's a snapshot of what you can look forward to:

  1. Purchase of a Ready-Built House/Flat

Say goodbye to the woes of house hunting in India while residing abroad. Canara Bank provides loans for purchasing a ready-to-move-in house or flat. Secure the property you've been eyeing without any hassle.

  1. Construction of House/Flat

If you own a plot and wish to construct a home on it, Canara Bank has got you covered. However, it's important to note that the loan for the purchase of only the site is not available under the housing loans. In case of composite loans, the amount allocated for the plot should not exceed 60% of the total loan amount sanctioned.

  1. Repairs, Renovation, and Upgradation

Need to refurbish your ancestral home or add a modern touch to your existing property? Canara Bank offers loans for repairs, renovation, and upgradation, capped at a monetary ceiling of Rs. 15 lakh.

  1. Acquisition of Second House/Flat

Already have a house or flat but looking to invest in another property? Canara Bank offers loans for the acquisition of a second property as well.

  1. Takeover of Existing Home Loan

If you have an existing home loan from other public or private sector banks, co-operative banks, RRBs, NBFCs, or HFCs, you can easily transfer it to Canara Bank for better terms and conditions.

Eligibility Criteria for Canara Bank NRI Home Loans

To make sure you're a good fit for Canara Bank's NRI home loan offerings, there are certain eligibility boxes you need to tick. Here's a breakdown:

  • Nationality: You must be a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO).
  • Age Limit: The age bracket is pretty generous—between 21 and 60 years. So, whether you're a young professional or approaching retirement, there's room for you.
  • Employment Status: You need to have a stable income source and a minimum of 2 years of employment abroad. A valid job contract or work permit is essential.
  • NRI Status Duration: You should have maintained your NRI status for at least 3 years.
  • Joint Applicants: If you want to increase your loan eligibility or share the repayment burden, your spouse or close relatives who are residents can join you as co-applicants.

Loan Amount and Your Contribution

Now, let's talk numbers. The loan amount you can avail depends on a few things, mainly your annual gross income. Here's a closer look:

Based on Income: Canara Bank offers a loan amount that's up to 4 times your annual gross income. In special cases, this can go up to 5 times, subject to specific conditions.

Your Contribution (Margin)

What's the chunk of money you'll have to put down yourself? Canara Bank stipulates this as a 'margin,' and it varies depending on the type of property and its age.

  • New House/Flat & Old House/Flat (Up to 10 Years Old): For loans up to Rs. 30.00 Lacs, the margin is 10%.
  • Old House/Flat (> 10 Years old): The margin spikes to 25%.
  • Above Rs. 30.00 Lacs & up to Rs.75.00 Lacs: The margin is 20%.
  • Above Rs. 75.00 Lacs: Here, the margin is 25%.

In cases of repair, renovation, or upgradation, a uniform margin of 25% on the project cost is applicable.

Interest Rates for Canara Bank NRI Home Loans

Interest rates can make or break a deal, right? At Canara Bank, the rates are structured based on the borrower's profile. Here's how it shakes out:

Table: Interest Rates for Salaried and Self-Employed Borrowers

Interest_Rates_for_Canara_Bank_NRI_Home_Loans

Note: The loan tenure can extend until the borrower reaches the age of 70, subject to certain conditions.

Additional Charges and Fees

Nobody likes hidden costs, so let's unveil them. Apart from the interest rates, there are a few other charges you should be aware of:

Table: Additional Charges and Fees

Additional_Charges_and_Fees

Security Measures for Canara Bank NRI Home Loans

Now, let's talk about the security aspect. Canara Bank requires:

Equitable Mortgage: This is the primary form of security, either by deposit of title deeds or registered mortgage where necessary.

Guarantee: A guarantee from a suitable resident Indian acceptable to the bank is needed.

Repayment Options

Last but not least, how do you pay back the loan?

  • By EMIs: Monthly payments are the standard route.
  • Remittance Channels: You can remit funds from abroad or transfer from NRE/FCNR (B) accounts.
  • Local Funds: Close relatives can also contribute.

Repayment can go up to a max of 30 years or until you reach 60 or 70 years of age, subject to certain conditions.

Repayment Holiday Conditions

Planning when to start repaying the loan is just as crucial as understanding the interest rates and additional charges. At Canara Bank, you have specific guidelines based on the type of purchase:

For Ready Built House/Flat: Repayment starts within two months from the first disbursement date.

For Site & Construction or Only Construction: The repayment kicks in within two months after the house's completion or 24 months from the first disbursement, whichever is earlier.

For Under-Construction Flats: You'll start repaying within two months of the construction completion or 36 months from the first disbursement, whichever comes first.

Processing Fees

And let's not forget about the processing fees, shall we? Canara Bank charges a processing fee of 0.10%, subject to a minimum of Rs. 500 and a maximum of Rs. 10,000.

Special Note: There's a 100% waiver on processing fees from September 1, 2023, to December 31, 2023. A nice little perk to keep in mind!

Required Documents and Formalities

Last but not least, let's talk paperwork. Applying for a Canara Bank NRI home loan involves a list of essential documents. Here's what you'll need:

For Salaried Individuals:

  • Loan Application: With 2 passport-sized photographs.
  • Identity and Residency Proof: A copy of the first four pages of your passport and the page with the visa stamp, or your IC/PIO card.
  • Employment Details: Valid work permit, copy of the employment contract, and your latest salary certificate or slip in original.
  • Financial Records: Six months' worth of bank account statements, both local and overseas.

Additional Documentation:

  • Property-Related: Sale deed, agreement for sale, approved building plan, NOC under ULC Act provisions, and more.
  • Legal Reports: Legal Scrutiny Report, EC for the past 13 years, Property Tax paid receipt, Khata, and permission for mortgage, wherever necessary.

Note: All these documents should be self-attested and, in some cases, attested by the Consulate or Notary Public of the respective country where you reside.

Wrapping Up

And there you have it—a comprehensive guide to Canara Bank NRI home loans. Whether you're buying, building, or renovating, Canara Bank offers an array of options to fit your needs.

FAQs

What is the maximum loan tenure for Canara Bank NRI home loans?

The maximum loan tenure is up to 30 years or until the borrower reaches the age of 70, whichever comes first.

Is there a processing fee for the loan?

Yes, a processing fee of 0.10% is charged, subject to a minimum of Rs. 500 and a maximum of Rs. 10,000.

Can I pre-close the loan?

Yes, you can pre-close the loan at your choice. No prepayment penalty will be charged for loans carrying a floating rate of interest.

What are the eligibility criteria for applying for an NRI home loan with Canara Bank?

The applicant should be a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO). The age limit is between 24 and 65 years, and the applicant should have a minimum of 3 years of work experience abroad.

How soon can I start repaying the loan?

Repayment starts either two months from the first disbursement or after the completion of the construction of the house, based on the type of loan you've taken.

Is there a special discount on processing fees?

Yes, there's a 100% waiver on processing fees from September 1, 2023, to December 31, 2023.

What's the minimum loan amount I can apply for?

The minimum loan amount is Rs. 2 lakh.

Is there a way to calculate my EMI beforehand?

Yes, you can use the Canara Bank NRI home loan EMI calculator available on their official website to get an estimate.

What is the interest rate for women borrowers?

Women borrowers enjoy a slightly lower interest rate, ranging from 6.90% p.a. to 8.85% p.a.

What kind of properties are eligible for the loan?

The loan is sanctioned only for properties that are non-agricultural and have valid documents for housing or non-agricultural purposes.

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