loan against property
Commercial Property Loans and Finance
NRIs show a marked preference for purchase of residential property over commercial spaces for investment in India. Surveys conducted in the USA amongst NRIs had only 9% of investors interested in commercial property. The RBI does provide for NRIs wishing to conduct business in India to procure loans against commercial property
Loan against Bank Deposits
Bank loans towards commercial property can be availed, with funding upto 60% of the value of the property.
With effect from 31st January, 2007, the RBI restricted the maximum loan permitted to NRIs against their own deposits held under Non Resident (External) Rupee NRE Accounts and Foreign Currency Non Resident deposits FCNR (B) Accounts to Rs. 20 lakh.
The loan tenure may range from 1-15 years, though some institutions would insist on wrapping up the loan in 4 -5 years.
Documents required for purchasing a house are different from documents required for acquiring a commercial space. The following need to be submitted:
- Photo identity,
- Residence proof
- Bank statements for the last six months
- Certified copies of balance sheets,
- Profit and loss statement of accounts,
- IT acknowledgement,
- Advance tax challans for both company and personal accounts for the last three years, partnership deeds
- Brief profile.
The sanctioned loan is disbursed only after
- Identification and selection of the property.
- Submission of the legal documents.
- Legal and technical clearance of the property
- Investment of personal contribution towards the property
Conditions to the Loan
- The business of chit fund,
- Nidhi Company,
- Agricultural or plantation activities or in
- Real estate business (excluding development of townships, construction of residential/ commercial premises, reads or bridges),
- Construction of farm houses;
- Trading in Transferable Development Rights (TDRs).
Repayment of Loan
- Out of remittances from outside India through normal banking channels,
- By debit to the NRO/NRE/FCNR account of the borrower or,
- Out of the sale proceeds of shares or securities or,
- Immovable property against which such loan was granted.
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