NRI Home Loan vs. Resident Home Loan - Home Loan Blog - Tata Capital

How NRI home loan is different from a resident home loan?

Mar 08, 2017

Many Indians residing abroad earn handsome incomes. This is the reason why they find it lucrative to purchase properties in India. But even those, who are not able to bring in all the funds required for purchase of property, are interested in taking the NRI Home loan route.

Many people are of view that NRIs are not allow to take home loans in India. But that is not true and financial institutions are more than willing to lend to NRIs. Let's take a look at the various features of NRI home loans and how they are different from resident home loans.

  • The criteria related to minimum age and minimum years of work experience abroad differ from one lender to other. Some banks require NRIs to have worked for atleast 2 years abroad while other ask for only one-year experience. Many lenders also have a minimum monthly salary as one of their eligibility criteria's.
  • For documentation, NRIs are required to submit a copy of passport, visa and employment related documents, salary slips, appointment letter, employment contract and address proof. Most of these are required for resident loans too except passport and visa related requirements.
  • The home loan interest rates in India for NRIs and other charges for NRI home loans are same as those offered to resident Indians.
  • Like their Indian counterparts, NRI home loans also have loan tenors of 20 to 30 years. But in certain cases, lenders might introduce restrictions like 10 or 15 years from time to time.
  • NRI loan repayment is due only in Indian rupees and not the currency of the country where NRI resides. Repayments can only be made by remittances from abroad, through normal banking channels or through a Non Resident Rupee (NRE) or a Non Resident Ordinary Rupee account (NRO).

These are some of the important features of NRI loans. But before you or your NRI friends approach the lenders, it's better to do your research so that you are updated about any possible changes in NRI lending rules due to political or regulatory changes.