What are the Home Loan Options For an NRI?

A house is an investment and like any other investment, requires careful thought. If you are a Non-resident Indian (NRI) wondering how you can get financing for building a house in India, Home Loans are the answer. There are many banks that provide loans to NRIs at reasonable interest rates and this post will inform you about those options.

How is a Home Loan for an NRI Different from One for a Resident Indian?

A loan for an NRI and a resident Indian is not the same. There are differences in the eligibility criteria, tenure, interest, and even in the screening process.

• The maximum tenure is usually around 15 years for an NRI as opposed to the 30 years for resident Indians.
• The interest rate for NRIs is typically higher by 0.2% to 0.7%.
• The EMI can only be paid only from NRE/NRO accounts.
• The screening process that NRIs have to go through to determine the maximum loan amount that they are eligible for is more rigorous when compared to that for a resident Indian.
• Since NRIs do not pay tax in India, they cannot claim tax benefits on the Home Loans.

What are the Different Home Loan Options for NRIs?

If you are an NRI looking for Home Loans in India, here are some of the options you should consider:

1. ICICI Bank

You can avail this loan for purchasing a property and for building a home. The application can be completed online and they offer doorstep services (when you are in India) until the loan is disbursed. You get to choose between fixed and floating interest rates.

• For a salaried person, the tenure of the loan can be between 10 to 15 years, depending on your educational qualifications and the country where you work. For a self-employed person, the ICICI Home Loan maximum tenure can be 20 years.
• You should have been residing abroad for at least 1 year for a salaried person and 3 years for a self-employed person.
• Minimum income should be above USD 42,000 per annum.
• Processing fees are 0.5%-1% of the loan amount plus taxes.

2. SBI

The loan by State Bank of India (SBI) is one of the best available for an NRI. They have lower processing fees, longer tenure, and lower interest rates when compared to other such loans.

• Processing fees are 0.35% of the loan amount plus taxes.
• SBI Home Loan Interest Rate ranges between 8.45% and 9.2% based on the loan amount and whether you are salaried or self-employed.
• Women are eligible for lower interest rates.

3. HDFC Bank

HDFC Bank Home Loans for NRIs in four categories based on the country where you work – the Middle East, United Kingdom, Singapore, and other countries.

• The HDFC Bank Home Loan Interest Rates charged vary from 8.5% to 9.7%.
• The processing fees are 1%-1.25% of the loan amount plus taxes.
• The maximum tenure can be 20 years, but the usual tenure is around 15 years.
• The loan can be used for buying a new home, constructing a home, buying an old home and renovating it, improving your existing home, or even for expanding the existing home.

4. Kotak Mahindra Bank

Kotak Mahindra Home Loan offers competitive interest rates, simple documentation, and easy loan disbursal process. You can also get your insurance from them at attractive premiums.

• You should have been working abroad for at least 3 years and should at least be a graduate.
• The maximum Kotak Mahindra Home Loan tenure can be 15 years.
• Your minimum annual salary should be Dirhams 48,000 for Gulf countries, USD 42,000 for all other countries, and USD 26,000 for Merchant Navy.
• Processing fees are 1.25 % of the loan amount plus taxes.

5. Federal bank

Federal Bank offers perhaps the highest loan amounts. The maximum amount can be INR 15 crores. The loan can cover up to 85% of the total cost of the house.

• The interest rate is around 9.05%.
• The maximum tenure can be 20 years.
• The loan can cover a wide range of activities from purchasing a house, constructing one, or remodelling a house.
• Processing fees are 0.5 % of the loan amount.

How to Apply for Home Loans?

Once you have decided the bank from which you would like to get the Home Loan, you can apply for the loan on MyMoneyMantra. After you fill in your details and request a loan, the bank will get in touch with you if they determine that you are eligible. You will also need to submit certain documents such as:

• Copy of your passport and work visa.
• Proof of address for your residence abroad.
• Salary slip for the past 3 or 6 months (depending on the bank).
• Loan application.
• Permission for house construction or occupancy certificate of ready to move houses.
• Payment receipts for the payments made to the builder.
• Employment contract.
• Address proof for your place of employment.
• Passport size photographs of the applicant.

Get Started

Getting a Home Loan is a very straightforward process. Go through the options listed, evaluate them per your needs, make a decision, and then fill and submit the application with the necessary documents. If you have been thinking about buying a house in your own country for a while, don’t put it off any longer.