How to Get a Loan for Land Purchase in India
Many visa holders in the U.S. want to buy property back at home in India. There are many advantages to getting land back home, but financing the land can be a headache. If you are in the U.S. but you are buying property in India, you might be wondering what your options are to finance the land.
Below we take a look at loans for land purchases in India, including what they are and how you can get one!
Why Buy Land in India?
Why do you need to buy land? Your needs will determine the reasons, but here are a couple of reasons why it could be a good idea to buy land in India.
A Retirement Home Back-Up Plan
You are currently working and living in the U.S., but you were born in India or elsewhere. It is a wise decision to have a backup plan for your retirement. Staying in the U.S. is an option. But, times and political climates change. It’s good to know that you’ll have a plan B if your Visas don’t work out.
Property Value Growth
Buying property is an investment which can grow over time. The property value is obviously subject to the local property market. But as you are buying an asset, your asset can grow over time providing more value in the long run.
Build Something For Your Family
You are in the land of opportunity. The Dollars you make in the U.S. can help support your family in India. Use the spending power of the Dollar to create better opportunities for your loved ones back home. You can build them the house they need.
Creates Sources of Income
The land you buy can be used to generate income. You can rent out the property, set up commercial infrastructure or even a factory to supply products or services to the local people. Not only will the property be helping to pay for itself, but it can also help to fund your retirement one day.
Why You Want to Avoid Taking Loans from Indian Banks
Remember, you’re not in India. So here are a couple of reasons why you don’t want to get a loan from an Indian bank.
The Indian Interest Rates
The Indian economy is growing. But, you’ll much rather want a loan from an American lender when you compare the two economies. Indian banks will charge you much higher interest rates than its American counterparts. A loan interest rate is one of the key determining factors of the cost of debt.
The interest rates available at most Indian banks for personal loans start at 11.49%. There is no guarantee that you will be able to get this minimum and chances are your rate will be even higher. On average, a personal loan in India will have an interest rate of at least 30%.
This is extremely expensive and in most cases double what you’ll get charged in America.
Many Indian lenders charge hidden fees. They may require you to pay a non-refundable application fee. Some may even charge you a processing fee between 1% and 2% of your principal amount. On a loan of 100,000 Rupees, that is an additional charge of 2,000 Rupees!
Overly Complicated Borrowing Processes
Many Indian banks still run old school methods. All of them don’t yet have online banking available. This brings a whole host of time draining issues to the table. You are required to submit lengthy paperwork by physical mail. Or else, you’ll need to deliver it at a physical branch in India. Both of these requirements will be hard to meet if you are physically present in the U.S.
Uncommon Collateral Practices
Many Indian loans require you to give items of value (like assets) to serve as security for the loan. This security tool is called collateral. Some banks can even require collateral to the value of $5,000. This is something you want to avoid if you can and can be a tough requirement to fulfill!
Some Indian banks can take up to 4 weeks, or even longer, to make the money you are borrowing available to you. When compared to American banks, this is a really long time! You might wait so long for the money that you end up losing a good opportunity to buy land.
Lack Of Online Repayment Options
As mentioned earlier, Indian banks still use old-school methods of banking. This means most banks don’t have online banking options, which means you have to make your loan repayments in physical cash at the branch. Not only does this have some logistical problems if you live in America, sending money to India can be risky.
Are there U.S. Loans for Land Purchase in India?
The great news is, there is! You can avoid all the hassle and charges of getting a loan from an Indian bank and rather get a U.S. loan for land purchase in India.
To get a U.S. loan for land purchase in India, you’ll take out a personal loan from a private lender like Stilt. You’ll use the personal loan to purchase the land in India.
Here are a few important terms to remember when it comes to personal loans:
- Principal Amount – The loan amount applied for without adding the interest.
- Interest Rate – The rate at which interest will accrue on your loan.
- Loan Term – The number of monthly repayments you’re required to make.
- Total Loan Cost – The principal amount plus the interest you pay over the loan term.
- Co-signer – Someone other than you (the borrower) who signs as security for the loan.
The terms and rates you can get for a loan for land purchase in India will vary from lender to lender. Generally, you can expect:
- Loan amounts between $1,000 and $100,000
- Repayment terms between 6 months and 7 years
- Interest rates between 5% and 20% (although this will depend on your credit record and if you are signing with a cosigner).
Most personal loans in the U.S. (unlike loans in India) are unsecured, which means you won’t need to supply any collateral (like an asset) to secure the loan.
How to take a Land Loan with Stilt
Getting a land loan with Stilt is really simple. Follow these guidelines to apply for your personal loan today!
1. Submit an Application
Submit your complete loan application here. Within 24 hours you will receive feedback. Stilt will ask for more information or a verification call if necessary.
Stilt will look at the following to see if you qualify:
- Current employment or employability
- Financial Behaviour
- Defaults, Collections or Bankruptcies
- Credit Check or Credit Score
You can get a loan from Stilt if you have one of the following visas:
- F-1 – International Students
- OPT – Optional Practical Training
- O-1 – Extraordinary Ability
- L-1- Intracompany Transfer
- TN – NAFTA Professionals
- J-1 – Cultural Exchange
- DACA – Childhood Arrivals
2. Receive an Offer
After the receiving and verification of your information, you can expect an offer from Stilt. They’ll send you a promissory note to sign. After you’ve signed, they’ll transfer the money and it will be available for you to use within 2 to 3 business days.
3. Start Making Payments
Once you’ve received the money, the only thing left to do is pay. You can schedule your payments through your account. Setting up your autopay should only take a minute. You can also pay additional early payments without any prepayment penalties.
Buying your dream property back home in India doesn’t need to be a headache. Get a U.S. loan for land purchase in India. You’ll get lower interest rates, better loan terms with no hidden costs! Now is the time to apply for your loan with Stilt. Allow us to help you get a good loan in the U.S. to buy the land you’ve been dreaming of.