Taking loan in US to buy property in India?

srisha4 · Post by **srisha4** » Sat Jan 29, 2011 11:27 am

Newbie to this forum & investing. Please help!

I am planning to buy a plot in Mysore (Karnataka) which is costing about 22 Lakhs (48K in USD) I can pay upto 20k USD and for the rest of the money i.e 18k USD, I am planning to take loan.

I did some research & asked around and found that I can take personal loans from some banks in my area from 3% to 6% which I believe I can pay off in 2 years.

I also found that home loans for NRIs in Indian banks don't come for less than 9%.

Can I do this? Has anybody taken loans from US banks to buy a property in India? Which one do you think is better? Why do I see that most people go for home loans in India & not loans from US?

Thanks !
Sri

direstraits88 · Post by **direstraits88** » Sun Jan 30, 2011 1:52 am

Yes, You are better off taking a personal loan here. It's easier and simpler. And certainly cheaper.

Just curious, where in Mysore are you buying this plot? What size? Is it MUDA site or MUDA approved private layout?

I'm just nostalgic having lived there long time ago.

R2I-2010 · Post by **R2I-2010** » Sun Jan 30, 2011 3:58 am

Don't forget to take in account the USD v Re exchange rate in account, for better or worse. I have done it in past but only because the ease of getting loan here in US.

srisha4 · Post by **srisha4** » Sun Jan 30, 2011 4:24 am

Thanks R2I-2010 & desipardesi.

@desipardesi I dont exactly know the area but this plot is somewhere within the city limits which is a MUDA site. My in-laws are doing the purchasing/ registration etc.

Lakshya · Post by **Lakshya** » Sun Jan 30, 2011 5:21 am

srisha4;364822Thanks R2I-2010 & desipardesi.

@desipardesi I dont exactly know the area but this plot is somewhere within the city limits which is a MUDA site. My in-laws are doing the purchasing/ registration etc.

I would say go with US loan, but you are talking about Plot- Land in that case I would suggest take some small amt may 3-4L loan from India, because in that case bank will check land title etc. There are higher chances of fraud when you buy land vs Apt. Yes if it is reputed builder and taking everything in white. In that case you may want to avoid Indian loan all together.

Just my 2 cents...

suba · Post by **suba** » Sun Jan 30, 2011 5:22 am

If you have 401k you can take a loan from it. From what I know the interest you pay on it goes to your 401k account itself.

Lakshya · Post by **Lakshya** » Sun Jan 30, 2011 11:05 pm

suba;364831If you have 401k you can take a loan from it. From what I know the interest you pay on it goes to your 401k account itself.

401K purpose is not for that.... I strongly discourage this.

direstraits88 · Post by **direstraits88** » Sun Jan 30, 2011 11:38 pm

suba;364831If you have 401k you can take a loan from it. From what I know the interest you pay on it goes to your 401k account itself.

If you lose your job, you need to pay back your loan or pay penalty for early withdrawal. Add to it the paper work /tax filings, you may be better off taking a loan and look for credit cards that allow 12 month tax free balance transfer option.