An NRI’s Guide to Applying for Home Loans in India

This guide could be a one-stop solution to navigating the exciting (yet sometimes confusing) world of NRI loan in India.

Can NRIs Get a Home Loan in India?

Yes! NRIs can absolutely secure home loans in India.

In fact, several banks provide specially designed NRI housing loan schemes packed with appealing features. These schemes are crafted to meet the distinct requirements and situations of NRIs, making the whole process easier and more accessible for them.

However, NRIs have the option to purchase residential and commercial properties in India; they are restricted from buying agricultural land. Also, for financing property purchases, NRIs have access to loans similar to those available to Resident Indians.

Typically, loans can cover 70% to 90% of the total value of the property, with NRIs required to fund the remaining amount from their personal resources, payable in INR (Rupees) exclusively, without the option of using any other currency.

NRI Home Loan Eligibility

To acquire a home loan for NRI, there are a few eligibility criteria that need to be fulfilled:

• Age Limit (Minimum and Maximum): The minimum age requirement is 18 years to ensure that the applicant meets the basic threshold of adulthood. The maximum age limit is 60 years, ensuring that the applicant can repay the loan within a reasonable timeframe.
• Loan Amount: The maximum amount of loan that an NRI home buyer can get depends upon the bank.
• Loan Tenure: This extends up to 30 years. Hence, the applicant gets the flexibility to repay the loan as per their financial circumstances and goals.

NRI Home Loan Interest Rate

Interest rates for home loans in India for NRI applicants are uniform across all banks, irrespective of whether the applicant is an NRI, PIO or a resident Indian. The credit score of the borrower plays a pivotal role.

Individuals with a credit score of 700 and above are more eligible to get favourable rates. On the contrary, the interest rates can be higher for the ones with a lesser credit score.

Salaried NRIs generally enjoy preferential rates. Businesspersons, on the other hand, may face slightly higher rates due to the perceived risks associated with their professions.

Are There Any Tax Benefits on Loan Against Property for NRI in India?

NRIs can also avail tax deductions on the principal amount of the home loan and interest rates similar to the resident Indians. Under Section 80C of the Indian Income Tax Act, they are eligible for tax deductions. Also, deductions for interest payments can be claimed under Section 24B.

Under Section 80C, NRIs can claim up to ₹1.5 lakh annually as tax deductions. Additionally, under Section 24B, they can claim up to ₹2 lakh annually as tax deductions for interest payments on their home loan.

Documents Required to Get a Home Loan in India for NRIs

Along with the duly signed loan application form, the applicant also needs to submit a few necessary documents.

KYC Documents

• Valid passport
• To prove NRI status: residence permit, OCI card, work visa, etc.
• Overseas address proof
• Indian address proof for communication purposes
• PAN Card or Form 60

Income Proof Documents

• Last two months’ salary slips
• Last three months bank statements from the overseas bank along with salary credit

Business Proof Documents

• Last three years’ audited financial statements
• Last three years’ IT returns along with income computation
• Incorporation documents of the business
• Last six months’ overseas bank statements
• Company registration certificate
• Office address proof
• Overseas Credit Bureau Report
• List of shareholders and directors

Property Documents

• Construction permission report (if applicable)
• Approved plan
• Agreement of Sale
• Property tax receipt
• Bank statements or payment receipts confirming all payments made to the builder

[Note: This list is not exhaustive. Banks may request additional information and documents if needed]

Conclusion

Securing an NRI home loan in India is possible, and the process is pretty streamlined. As NRIs explore the dream of homeownership in their own country, Piramal Realty stands out as a trusted partner that commits to offering the right kind of housing options at the best prices.

Disclaimer- This article is based on the information publicly available for general use as well as reference links mentioned herein. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim /disown any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.