NRI Home Loans

Overview

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.

NRI Home Loans Interest Rates


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

NRI Home Loan Eligibility


  • Applicant should be an NRI (Non-Resident Indian), PIO (Person of Indian Origin) or OCIs (Overseas Citizens of India). Where overseas citizens of the following countries are not considered eligible - Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Bhutan or Nepal.
  • Minimum age of the applicant should not be any less than 18 years at the time of loan application.
  • Maximum age of the applicant should not be more than 65 years at the time of loan maturity, or retirement age in case of salaried.
  • The applicant must be a graduate individual.
  • The monthly income of the applicant should be equivalent of USD 4,000 or above. However, it can vary depending upon the bank / financial institution from which you’re availing the funds.
  • Salaried Applicant must be working in current company for at least 1 year in continuity. Whereas, a self-employed applicant must be in the current occupation for the past 3 years at least.
  • A co-applicant or co-borrower who is a permanent resident of India, having a good credit score. The local co-applicant or co-borrower may or may not be a co-owner in the property.
  • Local applicant can be earning / non-earning resident, but must be presented at the time of submitting loan application.
  • Applicant must be residing overseas for at least more than 2 years in continuity.
  • Applicant must have resided in India for a minimum period of 182 days in the current financial year, or a total of 1 year and above in the preceding four years.
  • Applicant must be holding a NRE or NRO account in any of the Indian bank for remittance for the home loan EMIs.

Documentation for NRI Home Loans


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.

For Salaried NRIs / PIOs / OCIs:

  • Duly filled home loan application form along with passport size photographs.
  • Employment ID card or letter from Employer/HR on Company letterhead.
  • Salary Slip / Certificate for last 3 months along with latest ITR.
  • Copy of work permit, appointment letter or employment contract.
  • Continuous Discharge Certificate for Shipping cases
  • Letter from recognised public authority or public servant verifying customer identity with photograph.
  • Proof of highest qualification
  • Copy of Indian Passport
  • Copy of VISA (OCI Card in case of Overseas Citizens of India)
  • Overseas Credit Report
  • Copy of overseas resident proof and indian residence proof.
  • Copy of NRE/NRO Bank Statement for the last 6 months.
  • Copy of international salary account statements for the last 6 months.
  • Documents for any existing obligation.
  • Power of Attorney form, signed in favour of local co-applicant as approved by local Indian Embassy in your country.

For Self-Employed NRIs / PIOs / OCIs:

  • Duly filled home loan application form along with passport size photographs.
  • Copy of work permit
  • Business Existence and Continuity Proof for last 3 years.
  • ITR for Last 3 Years showing income computation.
  • Copy of Balance Sheet and Profit & Loss Account Statement for Last 3 Years, audited by certified CA.
  • Letter from recognised public authority or public servant verifying customer identity with photograph.
  • Copy of Indian Passport
  • Proof of highest qualification
  • Copy of VISA (OCI Card in case of Overseas Citizens of India)
  • Copy of overseas resident proof
  • Copy of NRE/NRO Bank Statement for the last 6 months.
  • Copy of a foreign bank account statement for the last 6 months, for self and business.
  • Documents for any existing obligation.
  • Copy of Tax Audit Report
  • Copy of CPC and Tax Paid Challan (if ITR is filed without digital signatures)
  • Power of Attorney form, signed in favour of local co-applicant as approved by local Indian Embassy in your country.

For Property:

  • Allotment letter from builder
  • Agreement of Sale
  • Registration and stamp duty receipt
  • Index- iiNOC from builder
  • Own Contribution Receipt
  • All builder linked documents
  • Development Agreement
  • Tripartite Agreement
  • Partnership Deed
  • Sale Deed
  • Title Search Report
  • NA order

For Local Co-Applicant:

  • Latest Photographs along with KYC Documents.
  • Proof of current business / profession
  • Copy of bank account statements
  • Proof of Business existence in case of Self-Employed.
  • ITR / Form 16 for last year

For NRI Home Loan Balance Transfer:

  • Loan account statement for the last 12 months with latest outstanding letter.
  • Existing loan details and 6 months bank statement from where EMI is deducted.

NRI Home Loan Charges


The charges applicable on NRI home loans are similar to a regular home loan, as mentioned below.

Processing Fee

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.

Banks/FIs Processing Charges
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

Pre-closure Charges

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.

Banks/FIs Preclosure Charges
HDFC Bank 2% of the outstanding loan amount
SBI NIL
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
Canara Bank NIL
BOB 2% of the outstanding loan amount
Andhra Bank NIL
Bandhan Bank NIL
Allahabad Bank NIL
Dhanlaxmi Bank NIL
DHFL Zero to 3% of the outstanding loan amount

Late Payment Charges

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.

NRI Home Loan Tax Benefits


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.