5 Things to Consider in Mind While Taking an NRI Home Loan

5 Things to Consider in Mind While Taking an NRI Home Loan

NRIs spend a lot of their career abroad and send money back to India for their family and savings. Most of their funds either go to a fixed deposit or for buying a property. Most NRIs doesn’t approach a bank for funding when buying a house. They think that getting a loan for NRI is not easy and requires a lot of clearance and documents. This is a wrong idea and we are writing this article for helping the NRIs in understanding the home loan process. Now let us look at important aspects of NRI home loan.

1. Eligibility

The minimum requirements for taking a home loan for NRIs are qualification and Income. Though these vary from banks to banks there are some standard requirements like one should have a minimum diploma or a graduate degree. As per the income requirements one should have a minimum 3 years of work experience in a foreign country. If you are earning any additional income in India it will also be considered for the loan eligibility criteria.

2. Rate of Interest

In most of the banks the rate of interest for home loan for both resident Indians and NRIs are almost the same. Some banks might charge a bit extra interest rate for NRIs compared to resident Indians.

5 Things to Consider in Mind While Taking an NRI Home Loan


3. Loan Tenure

The loan tenure is different for NRIs and is a lot lower than Indians. NRIs earn a lot more than resident Indians and so their repayment ability is also more. The number of monthly installments will be lower for them. In general resident Indians are eligible for upto 30 years of Loan tenure whereas loan tenure for NRI is around 5-15 years. This is also preferred for NRIs as they can pay more.

4. Documents Required

The list of documents required for NRI is different compared to resident Indians. The list of documents required are

  • Passport
  • Visa
  • Work Permit
  • Work experience certificate
  • Attestation letter from embassy of working country

5. Payment Modes

If home loans are taken under NRI category then you need to pay the EMIs only through NRE accounts. No other domestic funds can be used to repay the loan and it will not be accepted. This applies even for making the down payment. One need to pay around 15-20% of the home value upfront and this should also be paid using NRI/NRE accounts.

To summarize it is strongly advised to get home loans for NRIs rather than buying it with all cash. The process of getting home loan is also not complicated and the documents required are also easily presented.

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