How to Apply for NRI Home Loan in India

There are several banks in India providing NRI home loan. The structure of the NRI home loan will be similar to the structure of home loans available for regular residents of India; however, there are some differences in terms of the interest rates and tenures. The options for home loans are many, but the NRIs may face some difficulties since there is no well-defined regulator for home loans presently. 

Applying for NRI Home Loan

NRIs in India can apply for a home loan by following a few steps which are mentioned below:

Open an NRI bank account

The very first step for applying for an NRI home loan is to open an NRI bank account. A person cannot get a loan from a bank if he or she doesn’t have a bank account in that particular bank. Therefore, an NRI must choose a suitable bank and open an NRI account. 

Submit the documents

Without proper documents, a person cannot open a bank account, let alone apply for any loan. The NRIs require the following documents to apply for a home loan-

  • Copies of a valid passport and visa
  • Permanent address proof
  • Overseas address proof 
  • Oversees tax return statement
  • Qualification and salary certificate

Find a guarantor or co-applicant

NRIs must have a guarantor or co-applicant for home loans in India. In the absence of a local co-applicant, a guarantor is required. The applicants opting for a guarantor must collect the following documents of the guarantor-

  • Copies of a valid passport and visa
  • Present income documents
  • Overseas address proof

Set the tenure and interest rates

The interest rates and tenures for NRI homes loans are different from the regular home loans. The interest rates of NRIs home loans is slightly higher than regular home loans. On the other hand, the tenure for NRIs home loans is shorter than regular home loans, as some foreign currencies are stronger than Indian currency. 

There are some other influencing factors of NRI home loan, which are-

Eligibility

Eligibility is decided based on the applicants’ profile, age of applicant during the maturity of the loan, age of property during the maturity of Home loan eligibility and choice of repayment scheme. 

Income status

The income status of the applicant holds significance for NRI home loan. The applicant has to be either salaried or self-employed. In the case of self-employed applicants, copies of incorporation of the business, income proof, business profile, offices address proof and bank statements of the company will be required. 

For the salaried candidates, copies of current employment certificate, salary certificate and bank statements of salary transfer are needed.

Repayment of loan

Similar to the regular home loans, NRI home loans will have to be repaid in forms Equated Monthly Installments or EMI. Moreover, the loans can be paid in only Indian currency. Rent receipts can be used against EMI if the property is rented to anyone. 

Evaluating process

All process of evaluation will be done via mails. All related information will be sent to the official mail address of the applicant. The bank will contact the employer or company of the applicant to verify the facts and documents. 

Restrictions in owned property

As per the policy of the Indian Government, NRIs can own a maximum of two properties regardless of residential or business purpose.  

The guarantor or co-applicant must be present in the bank for the loan disbursement. It is crucial to keep in mind that penal charges will be brought against the applicants of the NRI home loan as per the bank policy in case of any miss-payment.