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Car is the preferred mode of communication by local as well as non-local residents of India. Expensive and poor quality public transport coupled with underdeveloped roads is the major reason why many Indians prefer to look for a suitable car purchase.
Buying a car for a foreign resident or a non-resident Indian (NRI) is an easy step by step process in India. You will find many established car loan providers that are willing and cooperative in providing car loans according to your needs. However, a non-resident Indian need to back his car loan claim through a resident Indian guarantor – who can be his employer, local business partner, Indian friend or an Indian relative.
After securing a resident guarantor and selecting a car, you can lease a car from any Indian bank by defining your
• Loan period – which can vary from one year to maximum 7 years
• Loan Payable – This will vary according to the price of car, income of the non-resident Indian and period of loan
• NRI Interest Rate – This according to RBI is approximately 12.25% of the amount loaned
• NRI Security – Like any Indian citizen, a non-local is also required to submit loan track record or similar details to obtain car loan from a reputable Indian bank
• NRI Documents – This includes personal details like identity cards and passport of self as well as that of the guarantor. Salary certificates, letter of guarantee, letter of hypothecation and proof of employment along with passport sized photographs of guarantor and self are needed for proper car loan processing and documentation. The bank will take a maximum of 2 working days to process a car loan in India.
The car loan is sanctioned to the non-resident Indian after due verification of the bank’s Field Investigator who rechecks your claims on employment and residence.
Car Loan Tip:
1. Always get a “No Objection Certificate” when buying a used car from an Indian bank.
2. Probe a low price car by inquiring about its registration. Buying a car registered in a different state will
later subject you to more taxes and registration fee. It is best to buy a car within your state of residence in
3. Negotiate the interest rate, as it may win you a lower interest rate on car loan – saving reasonably good
amount of money.