How can an NRI Home Loan Calculator help?
The SBI NRI home loan calculator helps you to determine your eligibility for the NRI home loan and also the EMI to be paid for a loan amount. This helps in two ways. It shows you how much you can borrow and also how much monthly commitment you need to make based on the EMI to be paid.
Firstly, it uses basic inputs like the income level and other liability commitments (like existing EMIs) to give you a quick idea of the amount of loan you are eligible for. Home investors must remember that the banks do not fund 100% of the cost of the home. In reality, up to 80-85% of the home value can get funded and while balance has to be brought in by the borrower as their equity margin for the home. That means, if the calculator shows that you are eligible for a home loan of Rs. 55 lakhs, then you can buy a home up to Rs. 68.75 lakhs, assuming that you will bring in 20% as equity and the balance 80% will be funded by the bank.
The second purpose of this calculator is to tell you how much EMI you have to pay for the said amount of funding. For instance, the calculator will tell you that if you are eligible for and borrow Rs 84.50 lakhs at 6.7% interest for 20 years, then your monthly home loan EMI will be Rs. 64,000. You can easily check the affordability of NRI Housing Loan.
How to use SBI Realty’s NRI Home Loan Calculator?
Ideally, you must start off putting very genuine numbers to get a realistic idea.
You can either enter the amount in figures or you can simply drag across the slider bar to choose preferred amount from the slider bar. Both are acceptable.
Here are the steps to use the calculator:
- Enter the amount of loan required by you.
- Enter your net income per month.
- Enter the amount of your ongoing EMIs. Put the amount as 0 if there is none.
- Enter the desired tenure of the loan.
- Enter the rate of interest. Check the ongoing rates in the market to keep it as realistic as possible.
With this information, the calculator will show you the -
- Loan amount you are eligible for
- Monthly EMI payable
What are the benefits of using an EMI calculator for home loan?
- Tells you very quickly how much home loan you are eligible as an NRI
- Gives you an idea about how your income and EMIs impact loan eligibility
- Helps you decide on closing existing loans if required
- Helps to decide whether spouse income needs to be added for eligibility
- Gives a quick idea of the amount of EMI needed to be paid for the loan
- Also gives an idea of the amount of margin to be brought in by the buyer
It tells you the NRI home loan eligibility in a second, once the data is inputted. However, for good and genuine results, it is essential that you input genuine data rather than just try and check for permutations and combinations of EMIs.
What are the factors that affect home loan affordability for NRIs?
The NRI home loan eligibility is based on the home loan affordability of the NRIs. It must be noted here that the calculator only gives a basic idea about affordability and eligibility. It is always to get a more granular picture with a direct sitting with the banker. Here are some key factors that impact affordability of home loans.
- The income level of the borrower. Higher the income, higher the eligibility. Most bankers also focus on the stability of income. A well paying job in a reputed company has much higher weight.
- The personal balance sheet also matters of the NRI borrower. To improve affordability, ensure that your existing EMIs (before home loan) are not more than 15% of income. High cost debt like credit cards can be a negative factor.
- The assets and investment also matter. You can improve your eligibility by evidencing assets and other investments owned by you.
- Spouse income can also be added. However, that should only be added if the spouse also has a steady income and their inclusion enhances loan eligibility.
- Past track record of loan repayments and the credit score will also matter.
Are SBI home loans available to NRIs also?
In India, home loans are available to NRIs also, just like resident Indians. NRIs are allowed to take a loan and investment in all kinds of real estate including home property and office property. NRIs are allowed to take a home loan and buy a home in India for future use or for current family use or they can even take a home loan and buy a house to rent it out. Only agricultural land cannot be purchased by NRIs, so loans for the same are not available.
Does the NRI also get tax benefits on the home loan taken?
Like the resident Indians, the NRIs can also get all the relevant tax benefits on taking a home loan.
For instance, NRIs can get deduction under Section 80C towards the principal repayment made each year towards the home loan.
In addition, the NRI can also get benefits under Section 24 of the Income Tax act up to Rs. 2 lakh if the property is self-occupied.
Tax benefits are also available for property bought jointly with spouse (you get dual benefits) and also for property that is rented out. These have to be managed out of income earned in India or money repatriated from abroad through proper banking channels.
Can I take the NRI home loan calculator as an assurance of loan eligibility?
No, you cannot. Remember that the eligibility calculator is entirely based on some term and rate assumptions made by you and inputted into the system. The actual loan eligibility will depend on factors like your actual income, type of property, your encumbrances, assets, and investment details, etc. The home loan NRI calculator only gives you a rough idea so that you are better prepared in terms of financial arrangements to be made for the home loan. It is just indicative and there is no commitment from the bank, based on the calculator.
What are some simple ways to improve home loan eligibility?
Home loan eligibility is a function of income and liabilities. There are a number of ways in which you can improve your home loan eligibility as an NRI. For example, you can boost your chances of a higher home loan by clubbing income of spouse or get a co-borrower who is willing to partially underwrite the loan. You can restructure your finances and reduce your high-cost debt. That way, monthly outgo comes down improving your net income on hand. Thirdly, there is a very routine way to do it. Often, your closed loans are not immediately updated at CIBIL, so the credit score does not reflect that. Take it up with CIBIL and get it rectified so your score and your eligibility improves. Show a propensity to save rather than a propensity to live beyond your means. That helps a lot.
How will the value of the property be decided for the home loan?
Most borrowers do their own due diligence on the title of the property, encumbrances, and the link documents. However, the bank will only rely on its own panel of valuers to give a value opinion on the property. In addition to the value of the base property, the bank funds all structural additions to bring the property to complete, as well as the registration and stamp duty charges. All these are funded. However, the base valuation of the property will be decided only based on the empanelled valuer of the bank giving their opinion. The bank makes some adjustments to that number to arrive at the final value.