Guide To Understanding NRI Home Loans in India

[Shashank Bhaskar]

Shifting overseas is a monumental step. It opens up a host of opportunities for careers, higher education, etc. Therefore, it has led to an increase in the number of Non-Resident Indians. Despite staying in a foreign land, Indians still have their roots laid down in their home country. 

Buying a property helps cement this connection for the future. Moreover, the lower rupee against foreign currencies makes it affordable. Nonetheless, you need considerable finance to invest in a house. Hence, banks offer Home Loan for NRI in India. It provides financial assistance for the purchase. If you want to apply for the same, here are some terms and requirements to know about:

Eligibility: The standard criteria for NRI Home Loan are quite similar to those expected from resident Indians. These include your credit score, age, income, qualification, etc. However, you also have to prove your NRI status and credibility. Besides, you need to co-apply with a relative, guardian, or a close representative. They are entitled to act on your behalf when your physical presence is required. 

Documentation: You submit a duly filled loan application form with NRI Home Loan documents. It includes your valid passport copy, Visa, age proof, address proof, income proof, bank statement, tax return, work permit, etc. Besides, if you have shortlisted the property, including an agreement copy or allotment letter is also necessary. This is the typical paperwork. However, banks have additional requirements for a home loan for NRI based on their policy. 

Loan amount: The borrowable amount depends on various factors. Banks have their terms that drive the decision. They evaluate your annual income, property value, and other eligibility factors for the same. However, the standard loan amount offered ranges between 75% to 90% of the property valuation. The rest is your contribution in the form of a down payment. It is best to use an NRI Home Loan eligibility calculator to get an accurate idea. 

Interest rate: You get to choose between a floating and fixed interest rate. The interest remains the same throughout the tenure in the former, and it resets periodically in the latter. It is due to the fluctuation in benchmark rates. Furthermore, your selection affects the repayment flexibility and the loan cost. Hence, make sure to understand which suits your needs better before deciding the interest rate type for NRI Home Loans. 

Tenure: Like other terms, the loan duration gets determined based on your eligibility. Most banks provide it for up to 10 to 30 years. But this is subject to changes depending on your repayment capacity and financial standing. They also consider your age for the same. If you are closer to retirement, you have fewer working years left. Therefore, you get low repayment tenure.