NRI Home Loans – Five important things to know

NRI home loans have been made super accessible and instant so that more and more NRIs can now own homes in their country. Previously, this process was long and tedious and required a lot of visits to the bank by the person asking for a loan. That’s one of the reasons why NRIs chose not to go through the trouble of applying. But all that has changed now, and NRI home loans are easier to get than ever before.

Home loans for NRIs do come with a bunch of stringent guidelines though and if you adhere to them you can easily get home loans approved. The first thing to keep in mind when applying is, the person applying for an NRI home loan should have worked in a foreign country for over a year. In the case of a self-employed person, this requirement is extended to three years. There is an income criteria as well. The minimum income for the applicant to be eligible for an NRI Home Loan is different for different banks but on an average, one must have an income of 30,000 USD or 35,000 DHM (for people residing in the UAE).

So, if you too want to invest in your home country, here are some more important things you should know about loans for NRIs.

1.  An NRI is defined by the RBI as a person who holds a valid passport but is immigrating to another country for an undecided period of time, for employment purposes or to carry out a business. Only a person who is employed or has a business outside India is eligible for an NRI home loan.

2.  The amount that is sanctioned to you as a loan will greatly depend on your educational qualifications and overall income. Normally a loan is sanctioned for 80% to 85% but the amount sanctioned will be decided on the basis of your monthly income.

3.  The NRI Home Loan Interest Rates in India for NRI’s is normally higher than the interest rate that is offered to residents. This is due to the increase in risk factors. Normally, the difference ranges from 0.25 to 0.5%. 

4.  The documents required for an NRI home loan are largely similar to the ones required for any other loan. An NRI will additionally require his/her passport, Visa, work permit, employment proof etc.

5.  All payments towards this loan need to be done in the Indian rupee and not the currency of the NRIs current residence.

Why you need to opt for an NRI home loan ASAP

One of the best investment opportunities for non-resident Indians (NRIs) is property. And now is perhaps the best time to invest with the Indian real estate market booming. Both the banks and the government are offering a helping hand to NRIs by offering a NRI home loan at the same rates as they apply to resident Indians. But getting home loans for an NRI in India isn’t the easiest thing in the world.  A lot of documentation is required and the government has very strict regulations for when it comes to NRI home loans. However, in recent times the Reserve Bank of India has relaxed some of its policies, thereby making it easier for NRIs to fulfil their dream of buying a home of their own in their country.

If you’ve been wanting to invest in property in your home country, there cannot be a better time to do it. First off, most banks have the same rate of interest on their home loans for NRIs as they do for resident Indians. In a few cases the interest rates may be a little higher, given that these loans have higher risk factors as compared to those given to residents.

The prerequisites for a person applying for an NRI home loan is that she/he should have worked in a foreign country for over a year. In the case of self-employed people or for those who run their own businesses this requirement is extended to three years. The rules for self-employed NRIs are slightly stricter than those for salaried NRIs. It is easier for a salaried person to get an NRI home loan, than it would be for a taxi driver or small business owner.

The main documents that you need to have if you want to apply for an NRI home loan are your passport, proof of residence, education qualifications, your PIO card, work permit, your latest salary slips, appointment letter of your current employer and bank statements of at least six months. These are the basic requirements, banks may ask for added documentation as proof but they are subjective to the banks.

The minimum income for the applicant to be eligible for an NRI home loan is different for different banks but the on an average, one must have an income of 30,000 USD or 35,000 DHM (for people residing in the UAE).

If you’re an NRI, this is perhaps the best time for you to invest in your country. So what are you waiting for? 

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