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


Many Indians living abroad earn a good income. This is the reason why they find it lucrative to buy property in India. But still, those, who are not able to provide all the necessary funds for the purchase of the property, are interested in taking the NRI home loan route.

Many people have an opinion that NRIs are not allowed to take mortgage loans in India. But that is not true and financial institutes are more than ready to lend to NRIs.


Let’s look at the various features of NRI loans and how they are different from residential home loan.

  1. The Criteria associated with minimum age and minimum years of work experience overseas differ from one lender to another. Some banks require NRIs to have served for at least two years abroad, while others require only one year of experience. Many lenders also have a monthly minimum wage as one of your eligibility criteria.
  2. To obtain documentation, NRIs must present a copy of passport, visa and employment-related documents, pay slips, appointment letter, employment contract and proof of address. Most of these are necessary for resident home loan too, except the passport and visa requirements.
  3. Interest rates and other charges for NRI loans are the same as those offered to resident Indians.
  4. Like its Indian counterparts, NRI home loan also have loan terms of 20-30 years. But in certain cases, lenders may introduce restrictions of 10 to 15 years from time to time.
  5. NRI loan payment is due only in Indian Rupees and not in the currency of the country where NRI resides. Refunds can only be made through remittances from abroad, through normal banking channels or a Non-Resident Rupee (NRE) or a Non-Resident Ordinary Rupee (NRO) Account.

These are some of the major characteristics of NRI home loan. But before approaching lenders, it is best to do your research to update yourself on any possible changes in NRI loan rules due to political or regulatory changes.


Read More: Things to Consider While Renting Investment Property in India

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