Know the Difference in Home Loan Rates for NRIs

Dev Singhraha

Relocation Expert

Indian real estate sector has been gaining interest from NRIs once again. With real estate law in place and home loan rate being affordable, it’s an ideal time for them to invest back home. But does NRIs also enjoys the same home loan rates as that of the citizen living in the country? Well, banks have particular add on conditions for lending home loans to NRIs, for a reason being, they reside in another country as banks want to be sure that the loan they are providing needs to earn them a return without any troubles. And in case of NRI borrowers, they take additional care. Let’s understand how.

Criteria: Banks uses the same format to know the applicant’s eligibility, irrespective of their nationality. Such as the applicant should be at least 18 years and not more than 60 years. They must be financially sound to repay the loan and have a good credit score along with other factors. But still, NRIs needs to meet some additional criteria. Apart from presenting the usual documents like residence proof, identity proof, NRIs need to present a document proving that they have been working in the country in which they are staying for at least two years. Also, the tenure for NRIs is shorter, that is between 15 to 20 years. Although if an NRI has a good negotiating skill, he or she can negotiate and get the tenure stretched to 30 years as well.

Documents that an NRI borrower needs to produce

Copies of visa and passport
Address proof of the resident country
Address proof in India
Three passport size pictures
Employer ID
Copy of work contract
Work permit proof
Past three-month salary slips
Six-month salary account statement
Proof of ITR of the previous financial year
NRE/NRO account details
Notarised general power of attorney

Initial stage: the bank surely requires detail of someone who stays within the country, who will be the point of contact, accountable for any issues. This is why banks insist that NRI borrowers should have a co-applicant or co-borrower residing in India. If that is not the case, then the NRI needs to appoint a family member as a power of attorney (PoA).

Application procedure: An NRI is not required to be present in India To apply for the home loan. The process can take place online. The borrower should check the websites of the bank and decide from where he or she wants to take the loan. Most of the banks have dedicated website pages for the NRIs, that also have the contact details - phone numbers/email IDs of the officials to contact about the product. After the borrower is satisfied with the product, a PoA needs to get appointed to start the process. For this, the NRI borrower needs to visit the Indian Embassy in the country of their residence where the bank would send certain documents for signing.

Home loan rate: The rates for NRI applicants are typically costlier as compared to an Indian borrower who lives in the country. Such as SBI charged 8.40 percent interest for a loan up to Rs 30 lakh for an Indian borrower whereas an NRI pays 8.75 percent interest for the same loan amount. Also, the NRI borrower pays a higher processing fee, legal-technical valuation fee, etc. to the bank. Also, an NRI applicant has to repay the loan in rupee terms in an NRO/NRE account.

Looking for property portal?

Find a property Post property

Take the Loan from the Right Company before Buying the House

With so many different financial companies and banks offering home loans, it has become difficult for the buyers to choose the right one. Many loan companies offer reduced interest rates along with some other offers. But that’s not the only thing t...

Apr 07, 2017
Don’t Let Home Loan Turn Into a Bad Debt

Times have progressed and so has the market scenario. Now we can afford to buy a property of our dreams by taking the loan from the banks or loan lending institutes. The previous generation lived a debt free life and encouraged the same, but now as t...

Jun 28, 2017
Terms Related to Loans That You Should Know

There are many terms which you often tend to unnoticed or don’t feel the urge to know. But this ignorance can land you into trouble. Same in case of loans. Along with reading it carefully, you need to know various terms related to it, their usage a...

Oct 19, 2016
How to Lower the Cost of Your Home Loan

Needless to say, that home is a long term commitment and it does create a lot of burden on the borrower’s shoulder if he or she does not get prepared beforehand. To have a stress free home tenure the borrower needs to plan everything very carefully...

Jun 12, 2018