Home Loan for NRIs – Things You Must Know!

Are you an NRI planning to take a home loan? Here is all you need to know about taking home loans in India.

Various banks in India like SBI, HDFC, ICICI, Kotak, Axis, among many others provide home loans for NRIs. Among these, SBI is known to offer the lowest interest rate which comes at 7.95% p.a. with a processing fee up to 0.25% of the loan amount. Before applying for a loan, it is important to look into every aspect and chose the right lender according to your needs.

Below are some of the key points every NRI should know about home loans in India.

Key Features: Home Loan for NRIs

  • You can apply for home loan for meeting your various needs like building a house or property, purchasing a house or renovating an old house in India.

  • Home loans can be applied online from anywhere in the world and loan applications can be tracked as well.

  • Interest rates come on a monthly reducing basis and you can choose between floating interest and fixed interest rates.

  • The home loan interest rates are subject to change from time to time at the discretion of the bank and/or in accordance with directives from RBI.

  • Loans can be repaid in small Equated Monthly Instalments (EMI)

  • There would be no prepayment charges for paying loans before it is due.

  • If you are a salaried employee, tenure is 30 years and if self-employed, maximum tenure is 20 years.

  • The loan-to-value (LTV) ratio will depend on the NRI home loan applicant’s age and income.

  • The major differences between a resident Indian applicant and NRI applicant are:
    a. NRIs have to plan for taxation in India and their residing country. b. NRIs have to manage foreign currency variations, as their investment will be in INR while income will be in a foreign currency. c. NRIs need to stay updated on tax, and Foreign Exchange Management Act (FEMA) policies associated to property purchase.

Home Loan Eligibility Criteria for NRIs 

  • Profiles: The following profiles are eligible to apply for housing loans:

    • Non-Resident Indian (NRI)

    • Person of Indian Origin (PIO)

    • Overseas Citizen of India (OCI) – except citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Bhutan or Nepal

  • Pre-requisite: While applying for a home loan as an NRI, you need to have a co-applicant, co-owner or co-borrower of the property who is a resident of India

  • Work Experience: As a NRI home loan applicant, you must have at least one year of work experience overseas if salaried, or two years of experience if self-employed.

  • Age: If you wish to own a property in India, you must be at least 21 years and the maximum age limit is 60 years.

  • Salary: It is important to note that all leading banks, finance companies and NBFCs (Non-Banking Financial Company) have defined different salary norms. So you can check with various lenders, compare the criteria and find out which one works better for you.

Home Loan Documents Required for NRIs

NRI Home Loan applicants will be required to submit the documents mentioned below:

  • Duly filled application form

  • Valid passport and visa

  • Employer ID card

  • Proof of legal work permit

  • Passport size photographs

  • Copy of employment contract

  • Foreign residence proof/bank statement/rent deeds

  • Property documents and approved plan

  • General power of attorney

  • Latest 3 salary slips

  • Last six months bank statements (for evidencing salary credits)

  • Details of any previous loans if applicable

  • Previous year Income Tax Return (ITR) except for NRI employees from Middle East and Merchant Navy.

How to Apply 

  • Check with a few reliable home loan lenders to know the best home loan deals available for NRIs

  • Choose a lender based on the eligibility criteria and your needs. Further you should submit up the application form along with the necessary documents

  • Connect with your lender in case of any clarifications needed.

  • Once you choose your co-applicant who is a resident Indian, issue a power of attorney in his/her name.

  • You have to go to the Indian Embassy in your country and collect the power of attorney form which will be in the format as per the lender you opted.

  • A final format needs to be signed in favour of the Indian co-applicant in the application.

  • Once this is completed, the Indian Embassy will put a seal of approval on it.

It is important that one must always read all rules and clarify doubts before applying for home loans. There are various online portals where you can calculate the Home loan EMI amount for your desired loan amount. It is advisable to confirm your home loan eligibility before deciding which property you are going to buy as it helps you to plan your expenses. If you have any further queries on home loans, feel free to contact us as our property experts can provide you with all necessary information.

ABOUT THE AUTHOR

As the most trusted real estate brand in the nation, we at Confident Group strive to create a positive, smooth and transparent medium for potential home buyers with anything and everything related to home purchase. We provide informative and engaging articles which cover useful details across many verticals from the real estate sector. Our 2-decade long expertise in building infrastructure projects across Kerala and abroad backed by the trust of over 10,000 customers earned us the reputation of being the best as a real estate brand in Asia. We hope that our blogs will help in translating our experience for the prospective buyers who are looking for their dream home.

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