Problem Statement: NRIs have to come to India every once in a while. They come to meet their families and friends and to take care of their property among other things.

Given the condition of Indian roads, traffic and other maintenance issues, two-wheelers make for great automobiles. Some NRIs prefer to have their collection of expensive two-wheelers.

Owning a bike provides the ease of traveling without relying on the public transport, saving a lot of time. The question is, is bike loan for non-resident Indians available to buy a two-wheeler in India?

Fortunately, NRIs can take a two-wheeler loan to purchase their favorite motorcycle.

Non-Resident Indians can take a two-wheeler loan. According to the law, any person who comes under the Foreign Exchange Management Act of 1999 (“FEMA”) can take a loan. Non-Resident Indians come under the law and so they can avail financing for a bike.

Who is an NRI?

It is important to know if you come under the definition of NRI as per FEMA, 1999. According to FEMA, An NRI is “a person resident outside India who is a citizen of India”. If you come under this definition, you are eligible for a Non Resident Indian bike loan.

Non Resident Indian Bike Loan Criteria

NRIs need to fit the criteria mentioned below to get a two-wheeler loan in India. The criteria differ from lender to lender, but this is the common criteria across lenders. The following are the bike loan for NRI criteria:

• You need to be at least 21 years of age.
• At the date of the maturity of the loan, you cannot be more than 59.
• People who run a business and people who are employed both can apply for a bike loan.
• The minimum salary requirements differ from one financial company to another but expect it to be higher than it is generally for Indians.
• You will need to disclose your other loans (if any) or financial obligations. This is done so that the lender can judge whether you can afford to take another loan or not.
• In the 12 months preceding the date of application, your cheque should not have bounced.
• Some lenders can ask for a co-applicant. A co-applicant becomes necessary if you don’t meet your debt obligations. It will be easier for the lenders to recover their money from someone who is an Indian rather than someone who stays abroad.
• The payment should be made through your NRO/NRE account. The payment is to be made in Indian Rupees only.

What are NRO and NRE Accounts?

NRIs are supposed to make their loan commitments via their NRO or NRE accounts. These accounts are a must for every Non-Resident of India if they want to do transactions in India.

A Non-Resident External Account is one that an NRI uses to deposit their foreign income. A Non-Resident Ordinary Rupee (NRO) Account is one that an NRI uses for the income that they make in India.

NRIs have to maintain two accounts so that it is easier for tax authorities to scrutinize their income. To take a bike loan for NRI,  NRIs are advised to maintain these accounts properly.

The payment is to be made in Indian Rupees only. Most lenders will not ask for a property as collateral. However, if the loan amount is high, banks may ask for a property as collateral or a guarantor.

Documents Required for a Non Resident Indian Bike Loan

You have to submit a few documents to get a Bike Loan for NRI. With the digital age, it has become really easy to take a bike loan for NRI.

You can submit your documents online and your loan will get approved shortly. NRIs need to submit a few more documents so that lenders can be assured of their ability to pay back their debts.

Since it is difficult to recover money from someone who lives abroad, lenders tend to be cautious. Here are the following documents an NRI will need to take a two-wheeler loan in India:

• You need to submit your passport certificate. A passport certificate or Indian identity certificate is issued by the authorities so that NRIs can travel abroad. This is an important document.
• You also need to submit your work permit, ID card, and visa to the financier you are applying to.
• NRIs need to submit an employment certificate at the time of application.
• The lender will also ask you to submit the documents that are ordinarily needed: recently taken passport sized pictures, a canceled cheque, ACH form for clearing electronically (mandated).
• Usually, lenders will ask you to submit your NRO and NRE bank account statements for 2 years. However, the period varies from lender to lender.
• Certain lenders also require 2 years’ Income statement.
• You will need to attest to certain documents at the embassy such as bank statements, income statements, passport certificates, etc. Embassies usually ask for a photocopy of the document along with your passport for attestation purposes. This is done to make sure that your documents are verified by the Indian authorities. Sometimes, fraudsters forge documents to get a loan.

Make sure that you have all the documents in order when applying. Ask the lender which documents need to be attested at the embassy. Then, attest the requisite documents. Once you have the documents in order, you will be one step from getting the bike of your dreams.

How to apply?

Loans for non resident Indians can be taken from the comfort of your home abroad. Most lenders now disburse loans online. Every step of the process has been made digital.

Make sure you get your documents attested, scan them, fill-up the form online, and submit your application. It will be a lot easier if you give your power of attorney for this task to someone in India.

For this, draw up a Power of Attorney with the help of your lawyer. Send it to the embassy for attestation along with the fees. Once your PoA is attested, it will be easier for you to get a bike loan for NRI.

Interest rates and other charges

Interest rates vary from lender to lender. Interest rates can start from 10% and onwards. The loan processing charges vary from lender to lender and from state to state.

Accordingly, documentation charges also differ from state to state. Stamp Duty will be as per state laws.

The loan foreclosing charges usually start from 4% in the case of a bike loan for NRI. Make sure to consider all the additional charges prior to taking a bike loan.

Conclusion

Two-wheelers are essential for travelling locally in India due to the narrow roads, traffic jams, potholes, etc. As far as bike loans for Non Resident Indians are concerned, NRIs should get their documents in order.

Get them properly attested by the Indian embassy in the country they are working in. Most lenders now have digital options for applying for loans.