Keeping in mind the increasing demand of Home Loan among NRI and unique regulatory requirements. Banks and housing finance companies have curated specialized schemes for Home Loans for NRI. And NRIs can avail Home Loan from any corner of the world with a hassle-free process. you can be easily tracking the application by sitting at the comfort zone of their home.
Detailed information about NRI Salaried Home Loans
Who is NRI (Non-Resident Indian)?
One can attain the status of being a NRI by staying overseas for more than 182 days. It has also been stated in the law that a person is resident. if he stays for more than 60 days in India during the year in question and for 365 days during the four years prior to that year.
NRIs (Non resident Indians) or PIOs (Person of Indian Origin) are the key segment in the residential property consumers. Many NRIs wants to buy some property in India for their loved ones or for investment purposes.
NRIs opt for Home Loan not just to purchase property, they can even take the Home loan for renovating their existing property in India or even for construction. Keeping in view now the Home Loans rate have been reduced and it has become much easier to take home Loan.
To avail Home Loan, NRIs also have to follow a procedure and should meet all the regulatory requirement outlined by the RBI. We have curated a list for you to have a clear understanding of the eligibility criteria and other guidelines that a NRI needs to adhere to while applying for home Loan.
Eligibility Criteria for NRI Home Loan
To apply for NRI Home Loan, your loan eligibility would too depend on your credit score, existing loan obligations, disposable income, employment stability, age dependents, source of income, monthly or annual income, other sources of income including spouse’s income and assets and liabilities. As poor credit score may reduce your loan eligibility. Age also plays a role in applying for Home Loan, you should of minimum 21 years of age while applying and maximum of 60 years at the time of retirement. However, it totally depends on the lender you are applying with.
Loan Tenure for NRI Loans
Most lenders offer Home Loans for a maximum period of 15 years depending on your repayment capacity, profession, etc. But that is not restricted as it depends on the lender only, they can even extend it up to 20 years depending on the profile. It varies from Customer profile, his repayment capacity. It would be advised that try opting for shorter period as it would help in reducing the interest amount. As a longer tenure would increase interest cost. However, shorter tenure will increase your Emi amount. So, you should pro-actively decide the tenure of the loan as per your capability.
Power of Attorney (POA)
Although it is not mandatory to have a co applicant or co-borrower in the guidelines issued by RBI. But most lenders insist on having one as the applicant is not a resident of India and lender may need someone to deal with, if any property related issues crops up. Hence the Co borrower or co applicant.
To transfer your rights to take decision on your behalf to your co-applicant you will need a Power of Attorney. For this you would have to visit the Indian Embassy to get it registered from the country you are residing in. The format of the Power of Attorney is not something that you can choose on your own as every lender has their own specified format of the same. So, you should adhere to the lender format only. Then you will have to send the registered copy to the lender to process your application.
As per the Foreign Exchange Management Act (FEMA), an NRI cannot have a saving account in their name in any bank in the country. Hence, it is mandatory for a NRI to have their account converted into a NRE (Non-resident External) or NRO (Non-Resident Ordinary) account as their residential status changes.
As these accounts would be used for the repayment of the loan. As per the RBI guidelines, the repayment of these loans can only be through a NRE or a NRO account with remittance from abroad. No other funds can be used for repayment and that too be in Indian currency only.
Home Loan Interest Rates for NRI’s 2020
Home loan interest rate varies from lender to lender and also as per the guidelines issued by the RBI. We have come up with a list of top lenders with their offers. Please have a look on the below list.
|Bank Name||Rate of Interest|
|SBI||6.95 – 7.70%|
|HDFC Ltd||6.95 - 7.70&|
|ICICI Bank||6.95 – 8.05%|
|LIC Housing Finance||6.95 – 7.30%|
|Axis Bank||8.10 – 8.65%|
|Bank of Baroda||6.85 – 7.85%|
|Canara Bank||6.90 – 7.90%|
Documents Required to Apply for NRI Home Loan
- Completed Home Loan Application Form.
- 2 passport size photographs.
- Proof of Identity – Copy of first four pages of passport and page with visa stamp, or IC / PIO (Person of Indian Origin) card.
- Valid work permit.
- Copy of the employment contract. An English translation of the contract duly attested by employer / consulate / SBIs foreign branches / offices, or Embassy in case the contract is available in any other language.
- Last salary certificate / slip in original.
- Copy of salary certificate duly attested by Indian Embassy / Consulate / SBI Branch / Exchange Companies abroad recognized by SBI.
- Copy of identity card issued by the current employer / proof of income in case of self-employed professionals / businessmen.
- Brief profile of applicant and work establishment.
- Details of previous employment.
- Bank account statement / passbook for the last six months.
- Account statement / passbook of overseas bank showing salary and savings.
- Proof of residence (driving license / utility bills).
- Copy of Continuous Discharge Certificate (CDC) – for applicants employed in the merchant navy.
- Sale Deed / Agreement for Sale.
- Copy of approved building plans / approvals in respect of proposed construction/purchase/extension.
- Original NOC under the Provisions of ULC Act.
- For Purchase / construction of house-Original title deed, non-encumbrance certificate on the property for 13 years, possession certificate and land tax receipt.
- For purchase of flat- construction agreement, allotment letter, copy of approved plan, estimates-payment schedule, undertaking from the builder in Form B format as specified by the bank
- Copy of the Order permitting Land Conversion in case of conversion of agricultural land.
- Copy of the land tax receipt / building tax receipt.
- Allotment letter of Housing Board / Builder / Co-op. Society.
- Detailed Cost Estimate / Valuation Report from approved value in case of outright purchase of an existing house / flat.
- Undertaking from the builder in Form B, which is the specified format for the bank.
- Notarized Power of Attorney, if applicant proposes to authorize a third party to execute the documents / complete the mortgage formalities / avail the loan instalments.
- Any other documents as required by the Bank.
Important Points to be kept in Mind while applying for NRI Home Loan
- The documents you would be submitting should not be in the local language of the country you are residing in. They should be translated in English beforehand that will help in processing your loan application faster.
- If you are in between switching your companies, then you must have the joining letter of the company, first month salary slip and relieving letter of the previous company.
- You need not to worry about the age of the property. If the property is well maintained, and if the residual age of the property is 12 years, the bank will sanction the loan