Thinking About Home Loan For NRIs? 8 Things Should You Know Before Avail It

By | April 14, 2020

Introduction

Wherever on earth, you go, you would find Indians. Since Indians are one of the most hardworking professionals, they are in demand across the world. But almost all Indians living abroad desire to come back to India at some point. A home helps fulfill the aspirations of NRIs living abroad.

This article simplifies the home loan process for NRIs and gives you an ‘all-you-need-to-know’ guide to home loans.

  1. What Is An NRI Home Loan?

An NRI (Non-Resident Indian) home loan is a loan offered specially for Indians living abroad, who are willing to buy land, construct a house, or renovate a property in India.

  1. What Kind Of Properties Can NRIs Buy?

NRIs or PIOs (People of Indian Origin) can invest in any immovable residential or commercial property in India. But, they cannot invest in other properties like plantation estates, agricultural land, or farmhouses.

  1. What Is The Eligibility Criteria To Apply For An NRI Home Loan In India?

As an NRI, you must satisfy the following criteria to be eligible to apply for a home loan.

  1. Your age must be between 21 and 70.
  2. You may be salaried or self-employed.
  3. Most lenders require the income to be above Rs. 500000 per month.
  4. You have to be an Indian citizen with an Indian passport. All NRIs and PIOs are eligible to apply for home loans.
  5. You should have work experience of at least one year.
  6. Some lenders require a resident Indian as a co-applicant, borrower, or owner of the property or land.
  7. What Is The Maximum Loan Amount An NRI May Get?

The loan amount depends on various factors like total disposable income, age, qualification, rate of exchange, and creditworthiness, among others.

  1. What Percentage Of The Property Value Can You Get As A Loan?

Any reputed lender offers up to 80% of the property’s market value for a loan amount of up to Rs. 75 lacs. For a loan amount of above Rs. 75 lacs, you may get up to 75% of the market value.

  1. What Is The Rate Of Interest For An NRI Home Loan?

The loan rates vary from lender to lender. Generally, reputed lenders offer the best deal. For salaried and self-employed professionals, the rate of interest is usually between 9.25% and 11%.

  1. What Documents Do You Have To Submit?

The basic documents like application form, PAN Card, address proof, educational qualifications, and passport/PIO card remain the same for both salaried and self-employed professionals.

Salaried individuals need to submit a copy of the work permit, last three months’ salary slips, appointment letter, income statement, and 6 months’ bank statement.

Self-employed professionals need to submit income proof, partnership deed (if applicable), MOA and AOA (if applicable), 6 months’ bank statement, and business profile, along with the basic documents.

  1. What Is The Repayment Tenure Of An NRI Home Loan?

Just like the interest rates, the repayment tenure varies from lender to lender. Although, under normal circumstances, the repayment tenure is 15 years for house purchase or construction and 10 years for renovation or repair of the house.

Conclusion

As an NRI, convenience, and trust are the most important things to consider while choosing a lender. Choose a lender who offers competitive interest rates and provides excellent customer service. 

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