NRI Home Loan

NRI Home Loan refers to loans specially designed for Non-Resident Indians (NRIs). NRI home loans are custom-made especially for: 

• NRIs (Non-resident Indians)

• PIOs (Persons of Indian Origin)

• OCIs (Overseas Citizenship of India) 

This loan is a specialised financial solution for Non-Resident Indians (NRIs) seeking to purchase property in India. It includes buying residential property, land for construction, and repair or renovation of an existing property. Lenders and financial institutions offer NRI housing loans under their diversified home loan options. 

Understand the cost of borrowing a loan before applying to assess if it suits your financial requirements. Here is the list of fees and charges that applicants are required to pay while getting a NRI home loan:

You can calculate your NRI home loan EMI online using the EMI calculator on Bajaj Markets. Enter the loan amount, preferred tenure, and applicable interest rate to receive an estimate of your monthly EMI, total interest payable, and overall repayment amount.

This enables you to plan your finances effectively and make informed decisions when applying for a home loan in India from abroad.

The eligibility criteria for NRI housing loans differ from lender to lender. Here are some of the basic NRI home loan eligibility parameters: 

• The applicant must be either a Non-Resident Indian (NRI), Person of Indian Origin (PIO) or Overseas Citizen of India (OCI).

• The minimum and maximum age of an NRI home loan applicant must be between 18 - 70 years.

• The applicant must be either a salaried employee or a self-employed individual

• The credit score of the applicant must be 750 or above. The applicants with higher credit scores have a higher chance of getting an NRI home loan approved.

• Lenders evaluate the applicant’s net monthly income to determine eligibility and repayment capacity. NRIs with a stable and sufficient income are likely to receive higher loan amounts.

• Lenders may require NRIs to show proof of stable work experience or a steady source of income for at least two years to qualify for the home loan. This adds credibility to the loan application and increases chances of approval.

There are a few other factors like income stability, resident country, qualification, asset and liability ratio, etc. These also play a major role in the reviewing of the application for a home loan for an NRI in India.

To verify your background, the lender will require you to submit various personal and professional documents. The important documents that a salaried or self-employed applicant must submit along with the NRI housing loan application form are:

Before applying for this loan, it is important to understand key factors that can affect your eligibility, repayment, and overall loan experience. Consider the following:

• Processing Fees

Lenders charge a nominal processing fee based on the loan amount. This fee covers the administrative costs of reviewing and approving your application.

• Flexibility of Loan Tenure

NRI home loans generally offer flexible repayment options, allowing you to select a tenure that aligns with your repayment capacity. This helps manage EMIs effectively alongside your other financial obligations.

• Balance Transfer Facility

If you already hold a home loan, you may transfer it to another lender offering lower interest rates or better terms. This facility can help maximise your savings over the loan tenure.

• Tax Benefits

As an NRI, you can claim deductions on both the principal and interest components of your home loan under applicable Indian tax laws, reducing overall tax liability.

• Overseas Credit Reports

Applicants residing in countries such as the USA, UK, UAE, Canada, Singapore, and others may be required to submit a recent overseas credit report as part of the loan process. 

Applying for a home loan as an NRI is quick and fully online. Here is how to proceed:

1. Open the preferred lender’s account and navigate to the NRI home loan section

2. Fill in your personal, employment, and income details to check your eligibility

3. Review your loan offer, amount, tenure, and interest rate, and accept the terms

4. Pay the required processing fee to move your application forward

5. Upload scanned copies of your KYC and income documents for verification

6. Submit the application, and after approval, the lender will disburse the loan amount as per the agreement

There are various benefits that an NRI can enjoy along with the home loan, some of them are: 

• Interest Rates: Banks and other financial institutions offer very low and attractive interest rates, which are very beneficial for the NRIs.

• Type of Interest Rate: NRIs get to choose the type of house loan interest rate - fixed or floating interest rate, as per suitability.

• Other Services: Along with the home loan fund, NRIs also get free-of-cost accident insurance till the maturity of the loan.

• Easy Process: The procedure for applying home loan for an NRI in India is very simple and easy. It also comes with a doorstep facility till disbursement in India.

• Pre-payment: You can also opt for part-prepayment of the loan without any additional charges on your NRI home loan account.

You can choose from a range of home loan options to invest in property in India. Picking the right loan depends on your purpose. Here are the common types of loans you can consider from top lenders in India:

• Home Loan

You can take a home loan to buy ready-to-move-in or under-construction properties. You can also use it to construct a new house on your own land.

• Plot Loan

You can opt for a plot loan to purchase a residential plot, usually with a requirement to start construction within a specified period.

• Home Improvement or Renovation Loan

You can use this loan to renovate or upgrade your existing property, covering costs for repairs, expansions, or other improvements.

• Balance Transfer Loan

You can transfer your existing home loan to another lender offering better interest rates or terms. This helps you reduce interest costs and manage your repayments more effectively.

In case you have an NRI Personal Guarantor on your NRI housing loan, you will also have to submit the following documents -

• Visa Copies of the Guarantor

• Passport Copies of the Guarantor

• Latest income documents of the Guarantor

• Address Proof of the Guarantor

Home loan balance transfer facility enables NRIs with existing home loans to transfer the outstanding loan amount to another lender with a lower interest rate. This helps them in cutting down the overall cost of interest. Though it is a very beneficial facility for the borrowers, it is important to remember that before letting you transfer your NRI home loan, the new lender will conduct a comprehensive analysis regarding your credit worthiness.

According to Section 80C of the IT Act of 1961, NRIs who file their income tax returns in India are eligible to enjoy tax benefits on their NRI housing loans. The home loan tax deduction is for both the interest as well as the principal component of the home loan.

In case the home for which you have taken an NRI home loan is vacant, you can get to enjoy the following tax benefits: