India boasts a massive pool of NRI populations around the globe. And in recent years, there has been a surge in NRI investments in India, especially in the real estate market. This is mainly due to a couple of factors, the current condition of the rupee, and the FEMA act.
The Indian investment ecosystem is very much “NRI-friendly” as the current rupee is one of the world’s weakest currencies. Non-resident Indians or more commonly referred to as NRI’s are people from Indian descent or origin who live outside the Boundaries of India. These people earn their livelihood in foreign currencies such as dollars, euro, or dirhams and invest heavily in properties in the Indian subcontinent.
Another deciding factor is the Foreign Exchange Management Act, 1999, or FEMA. This act defines NRI as residing outside of the Indian borders for employment or business for an indefinite period. If you come under this act, you can undoubtedly avail for a home loan in India.
However, there are certain drawbacks as well. As an NRI, you cannot buy more than two residential properties regardless of if you have a property in the country that you are residing in. Although you can invest freely in commercial property and there are pretty good subsidies behind that as well.
Getting a home loan for NRI is a fairly straightforward process, with some minor intricacy. We have prepared an in-depth guide for you so that you can avail without much hassle. So without further ado, let’s get started.
Eligibility Criteria and Documentation
To start with, you need a minimum graduate degree to apply for a home loan in India. But different banks have specific requirements and selection criteria to apply for an NRI home loan. Specifically, ICICI bank will only grant you a home loan if you have at least three years of employment with a graduate degree and other work experience.
If you are working in a private firm, then you need to provide documentation for a minimum of 2 years of experience. However, the loan amount is directly dependent on your income and job profile. We will cover that more.
For documentation, you need to have a copy of the passport, visa, and work permit of the country you are working in. Depending on the bank you choose, you may also require work experience certification, salary slips, and non-resident external (NRE).
The salary certificate has to be attested by the embassy or consulate to be termed as eligible. You also need to give a local address and a power of attorney (PoA) to someone based in India.
Documents required for NRI Home Loan
|Eligibility||Salaried or Self-Employed|
|Work Experience||Minimum 2 years of work experience in present company|
|Age Criteria||Minimum: 18 years Maximum: 60 years/retirement age|
|Loan Tenure||Up to 30 years|
|Loan Amount||Depends on the borrower’s profile|
|Interest Rate||7% onwards|
|Prepayment Charges||Nil to a maximum of 2%|
|Late Payment Charges||1% to 3%|
|Resident Type||Non-Resident Indians (NRI) or Persons of Indian Origin (PIOs)|
The procedure for applying to an NRI home is simple. Go to an online platform and submit your application. These platforms can help you find the perfect lender for you. They also provide a lot of flexibility in uploading your documents and managing the process on your behalf.
After issuing the Power of Attorney (PoA), go to the nearest embassy and verify the PoA document in the stated format. Once everything is done, the embassy will put a seal of approval on the file, and you will be eligible to apply for a home loan in India.
Comparing Best Banks for NRI Home Loan Current Interest Rates in India
As we mentioned, all the banks have different policies for NRI home loans. Some banks offer high-interest rates with low processing fees, while some banks prefer the opposite way around.
From our research, we found the SBI home loans to be the most secure option. The interest rate is the lowest you can get, with a minimum processing fee. Other benefits include no penalties and repayment tenure of up to 30 years. The eligibility bracket is also quite relaxed.
To give you an overview, here is the detailed comparison of banks that offer an NRI home loan in India.:
|Bank Name||NRI Home Loan Interest Rate|
|SBI||7.35% – 7.7% p.a.|
See SBI Home loan current interest rates
|HDFC||7.00% to 7.50% p.a. |
See HDFC current interest rates
|Kotak Mahindra||7.1% – 9.3%p.a.|
See Kotak mahindra current interest rates
|ICICI Bank||7.5% – 8.05% p.a. onwards|
See ICICI Home loan current interest rates
Note: Interest Rates are subject to change from time to time at the discretion of the Bank and/or following directives from RBI and the additional lockdown rules imposed by the central government.
So this was the process of getting an NRI home loan in India. We mentioned all the necessary details that you need to know about the NRI home loans, and we hope that this will help you in your journey.