Even if one is not a resident Indian, he/she can still get a home loan from banks and financial institutions in order to purchase or construct a property in India, under Foreign Exchange Management Act (FEMA), 1999.
Almost all the banks and Financial institutions offers home loans to NRIs (Non-Resident Indian), PIOs (Person of Indian Origin) and OCIs (Overseas Citizens of India) including personnals of Merchant Navy.
An eligible borrower can avail funds from minimum Rs. 5 Lacs to as high as Rs. 1 Crore or higher depending upon the bank, subject to 60% to 90% ratio of applied loan amount based on the FOIR norms. However, in order to avail home loans for a non resident indian, he/she must apply with a local co-applicant or co-borrower who must be a permanent resident of India.
It is important to notice that unlike regular home loans where tenure is longer upto 30 years, NRI home loans are not more than 15 to 20 years which varies from bank to bank. Moreover, the NRI applicant must be holding an NRE / NRO account with any of the Indian banking institution beforehand applying for the loan, since repayment towards the home loan is only allowed from an Indian NRE/NRO account.
|Banks/FIs||Annual Interest Rates|
|HDFC Bank NRI Home Loan||08.60% - 09.45%|
|SBI NRI Home Loan||08.55% - 11.70%|
|Axis Bank NRI Home Loan||08.90% - 12.00%|
|ICICI Bank NRI Home Loan||08.80% - 09.25%|
|YES Bank NRI Home Loan||09.35% - 10.50%|
|Citibank NRI Home Loan||09.65% - 11.15%|
|Tata Capital NRI Home Loan||09.00% onwards|
|Kotak NRI Home Loan||08.90% - 09.25%|
|SC Bank NRI Home Loan||14.00% - 14.25%|
|Canara NRI Home Loan||08.75% - 08.95%|
|PNB NRI Housing Loan||09.05% - 12.50%|
|BOB NRI Home Loan||08.70% - 10.20%|
|Andhra Bank NRI Home Loan||08.80% - 09.95%|
|BOI NRI Home Loan||08.75% - 09.05%|
|Syndicate Bank NRI Home Loan||08.65% - 09.40%|
|City Union Bank NRI Home Loan||11.00% - 13.00%|
|IDBI Bank NRI Home Loan||08.75% - 10.40%|
|Bandhan Bank NRI Home Loan||12.41% - 13.44%|
|Federal Bank NRI Home Loan||08.75% - 11.15%|
|Allahabad Bank NRI Home Loan||08.55% - 09.55%|
|OBC NRI Home Loan||08.70% - 08.80%|
|Dhanlaxmi Bank NRI Home Loan||09.90% - 12.90%|
|DHFL NRI Home Loans||10.00% onwards|
When it comes to NRI home loans, the documentation process is comparatively big as compared to home loans for indian citizens, since one also needs to submit the documents for the local applicant at the time of loan application.
The charges applicable on NRI home loans are similar to a regular home loan, as mentioned below.
The processing charges are levied on NRI home loans by the banks and financial institutions in order to process the loan application, which includes the expenses the bank/financial institution has to make in order to do the assessment of the home loan such as manpower used for verification, maintenance of the documents, and checking the credit history of the applicant etc. Normally, the processing charges levied by the lenders ranges from 0.50% to as high as 5% of the loan amount.
|HDFC Bank||Upto 1.25% of the loan amount
Minimum Rs. 3,000 for Salaried & Self-Employed Professionals, and Minimum Rs. 4,500 for Self-Employed Businessmen
|SBI||0.35% of the loan amount
Minimum Rs. 3,000 to Maximum Rs. 10,000
|Axis Bank||Upto 1% of the Loan amount
Minimum Rs. 10,000
|ICICI Bank||0.50% of the loan amount|
|YES Bank||Upto 1% of the Loan amount|
|Citibank||Up to Rs. 5,000|
|Tata Capital||Upto 1.50% of the Loan amount|
|Kotak||Upto 1.25% of the Loan amount|
|Standard Charterd Bank||0.50% to 1.50% of the Loan amount|
|Canara Bank||0.10% of the loan amount
Minimum Rs. 500 to Maximum Rs. 10,000
|BOB||1% of the Loan amount|
|Andhra Bank||0.50% of the Loan amount
Maximum Rs. 10,000
|BOI||0.25% to 0.75% of the loan amount
Minimum Rs. 1,000 to Maximum Rs. 50,000
|Syndicate Bank||Zero to 0.125% of the Loan amount
Minimum Rs. 500 to Maximum Rs. 5,000
|Bandhan Bank||1% of the Loan amount|
|Allahabad Bank||0.24% to 0.40% of the Loan amount
Maximum Rs. 50,000
|OBC||0.50% of the Loan amount
Minimum Rs. 2,000 to Maximum Rs. 30,000
|Dhanlaxmi Bank||1% of the Loan amount
Minimum Rs. 10,000
|DHFL||Rs. 5,000 to Rs. 20,000|
Preclosure charges are to be levied by the banks and financial institutions if the borrower wants to close his/her loan account before the pre-decided tenure. Pre-closing a home loan results in changing the home loan’s agreed terms and conditions and mainly loss of the interest at the bank’s end. To settle this loss at the bank’s end, the borrowers are to be paid an additional cost as a penalty in regards to pre-closure of the loan account. The preclosure charges usually ranges between 1% of the principal outstanding to as high as 5% of the principal outstanding.
|HDFC Bank||2% of the outstanding loan amount|
|Axis Bank||2% of the outstanding loan amount for Fixed Rate Loans
NIL for Floating Rate Loans
|ICICI Bank||2% of the outstanding loan amount|
|YES Bank||2.5% of the outstanding loan amount for Fixed Rate Loans
NIL for Floating Rate Loans
|Citibank||Zero to 2% of the outstanding amount|
|Tata Capital||Zero to 1.50% of the outstanding amount|
|Kotak||Zero to 4% of the outstanding amount|
|Standard Charterd Bank||Zero to 2.5% of the outstanding amount|
|BOB||2% of the outstanding loan amount|
|DHFL||Zero to 3% of the outstanding loan amount|
The additional interest applicable on a late payment of home loan, is to be paid if the borrower fails to pay the EMI by the payment due date. The default charges levied by the banks and financial institution usually is 2% per month or 24% per annum.
Since NRIs / PIOs / OCIs pay income taxes on their deposits, investments or lending in India, they are also entitled to receive income tax rebate for the same. On Home Loans, an NRI / PIO / OCI applicant can avail income tax benefits of upto Rs. 1.50 Lacs under Income Tax Section 80C and maximum of Rs. 2 Lacs under Income Tax Section 24. And, additionally can receive a rebate of Rs. 50,000 under Income Tax Section 80EE if he/she is a first-time home owner.