A good means of NRI real estate investment in India in India is a home loan. By providing an Indian home loan facility, NRIs have been given the right to build a house and buy property. Apart from this, a home loan is a beneficial option to keep your money safely invested.
Considering property investment in India, NRIs should get information about NRI home loans in India before taking a home loan. Here, we are sharing information regarding NRI-friendly banks in India that offer home loans for property investment.
Why Should NRIs Consider Property Investment in India?
Investing in property in India allows NRIs to enjoy appreciation in value, stable returns and to be in sync with trends. Therefore, they should invest in property in India. Let us know the other major reasons, why they should invest in property in India-
- Growth of Indian Real Estate:
As technology is constantly developing in India, the demand for property investment here is also increasing rapidly.
The GST register, development, and other factors are also affecting the investment. From this point of view, Indian real estate has become a profitable option for NRI property investment.
- Tax Benefits:
Along with the benefits of property investment for NRIs in India, they also get tax benefits on property loans.
- Exemption on home loan interest:
Under section 24B, NRIs will get tax exemption on interest up to ₹2 lakh.
- Exemption on principal amount:
Under section 80C, NRIs will get tax exemption up to ₹1.5 lakh.
- Benefit on rental income:
Up to 30% standard deduction will be allowed on the rental income of NRIs.
- Long-term capital gains tax exemption:
If NRIs sell property in India after 3 years, NRIs will be able to save tax through reinvestment.
- Avoid double taxation:
There is a provision of a DTA agreement in India for NRIs so that they do not have to pay tax twice.
- Safe Investment:
The benefit of property investment for NRIs in India is that the Government of India has provided a safe and convenient special rule for NRIs.
With this, NRIs can keep track of their property very easily. This ensures the safety of their property investment. Also, the process of transfer and service has been simplified.
Eligibility Criteria for NRI Home Loans in India:
General Requirements:
For home loan for NRIs in India, some of the following qualifications are required-
Eligibility criteria:
- Under NRI home loan eligibility, the applicant should be employed or non-employed.
- The applicant should be at least 21 years of age.
- Apart from this, the maximum age should be 60 years.
- The applicant must have a stable source of income.
- It is necessary to have legal employment or permanent work.
- It is mandatory to have at least 1 to 2 years of experience in employment in big countries like America, Europe, and the Middle East.
Documents Needed:
List documents required for applying for an NRI home loan. The list of documents for NRI home loan is as follows-
- Full passport Work visa copy
- Loan application
- Company ID card
- 3 passport size photos
- Proof of valid work permit
- Copy of employment contract
- Current overseas residential proof
- House lease agreement statement
- Utility bill
- Card statement
- The last three months’ salary slip
- The last six months’ salary account and NRI / NRO account information
- Last year’s ITR except for NRIs and merchant navy employees in Middle East countries
- Previous loan details
- Property papers
Top NRI-Friendly Banks Offering Home Loans in India:
NRI home loan banks in India are special banks that provide a variety of convenient services to NRIs. Let’s know the top NRI-friendly banks.
- State Bank of India (SBI)
- Interest rate- Starting from 7.95% per annum
- Loan tenure- Flexible repayment period of up to 30 years
- Key benefits- Competitive interest rates and special schemes
2. HDFC Bank
- Interest rate- Starting from 8.6%
- Loan tenure- 20 to 30 years applicant profile
- Key benefits- Easy application process, pre-approval facility dedicated NRI customer service, etc.
3. ICICI Bank
- Interest rate- Starting from 8.75%
- Loan tenure- 20 to 30 years, depending on applicant profile.
- Key benefits- Attractive interest rates and flexible tenure, online application, and documentation.
4. Axis Bank
- Interest rate- 8.85% onwards
- Loan tenure- Up to 20 years.
- Key benefits- Multiple home loan options for NRIs, simple documentation, quick processing and disbursement.
5. Bank of Baroda
- Interest rate- 8.5% to 9.3%.
- Loan tenure- Up to a period of 20 to 30 years.
- Key benefits- Competitive home loan interest rates for NRIs, loans on different types of properties, and strong NRI banking support.
6. Punjab National Bank (PNB)
- Interest rate- Starting from around 8.6%,
- Loan tenure- 20 to 30 years.
- Key benefits- Affordable interest rates for NRIs, transparent loan policies, and support for residential and commercial properties.
From these NRIs-friendly banks, you can get the Best NRI home loans.
| Bank | Interest Rates (per annum) | Loan Tenure |
| State Bank of India | Starting from 7.95% | Flexible repayment period of up to 30 years |
| HDFC Bank | Starting from 8.6% | 20 to 30 years applicant profile |
| ICICI Bank | Starting from 8.75% | 20 to 30 years, depending on applicant profile. |
| Axis Bank | 8.85% onwards | Up to 20 years. |
| Bank of Baroda | 8.5% to 9.3%. | Up to a period of 20 to 30 years. |
| Punjab National Bank | Starting from around 8.6% | 20 to 30 years. |
Features of NRI Home Loans:
- Loan Amount and Tenure:
NRI home loan features are that loans ranging from Rs 10 lakh to Rs 10 crore can be taken for a tenure of 1 to 30 years which depends on the property value and credit score of the applicant.
- Interest Rates:
Special types of discounts are given on NRI home loans. It is of two types – fixed and floating. In fixed the NRI interest loan rates are stable, whereas in floating the interest rate keeps fluctuating according to the market conditions.
- Prepayment and Foreclosure:
This is a feature of NRI home loans. There is an option in which the loan amount can be repaid partially or fully before the due date. This option is home loan prepayment.
- Tax Benefits:
Under Section 80C, there are tax benefits for NRIs on principal repayment up to ₹1.5 lakh. Whereas, a deduction of up to ₹2 lakh is available on the NRI loan interest amount of every home loan under Section 24. But the property should be your own.
Also Read – Investment Strategies for NRIs: Maximizing Returns in Indian Real Estate
Documents Required for NRI Home Loans:
Before taking a loan, you should know and firmly understand the NRI loan requirements. For the information regarding NRI home loan documents, you can check the given points-
- Identity Proof: Passport, Visa, etc.
- Proof of Income: Salary slips, bank statements, etc.
- Property Documents: Sale agreement, property title, property investment documents etc.
- Other Documents: Employment letter, work visa, etc.
Benefits of Taking an NRI Home Loans:
- Easy Online Application: Under online application, you get easy NRI home loans. The online application process for NRI home loans is very simple and digital.
- Flexible Repayment Options: NRIs have flexible repayment options to pay their home loan EMIs through NRE/NRO accounts.
- Competitive Interest Rates: NRI home loan benefits include longer tenures on NRI home loans and competitive interest rates are usually low, making it an affordable deal.
Challenges Faced by NRIs While Availing Home Loans:
- Currency Exchange Issues: NRIs face a lot of NRI home loan challenges in repaying home loans due to frequent fluctuations in currency exchange rates.
When the foreign currency weakens, the EMI rate becomes more expensive, which can lead to a greater financial burden on repayment.
- Legal Hurdles: After NRI loan repayment issues, it can also be a challenging task for NRIs to follow the legal documents and rules accurately while taking a home loan.
Verification of necessary documents related to the property, requirement of power of attorney, and following different rules of the country make getting a home loan a complicated process.
- Limited Options for Certain Properties:
Under Indian rules, NRIs are not allowed to buy agricultural land, cultivable land, and plots. Thus, NRI property restrictions are also problems for them.
How to Apply for NRI Home Loans in India?
If you want to apply for an NRI home loan, read the given points and know NRI home loan steps –
Step 1: Find out the various banks and financial institutions that provide home loans to NRIs. These include SBI, Bank of Baroda, Axis Bank, HDFC Bank etc.
Step 2: Check the eligibility to apply for these and prepare all the necessary documents.
Step 3: To apply for a home loan online, upload all the documents on its official website.
Step 4: After this, get your home loan approval from the bank.
Step 5: Sign all the home loan documents and receive their amount.
Few best Properties to consider for NRI after getting loan –
Online vs. Offline Application:
Under the NRI loan application process, applicants can move ahead in two ways, offline and online. Here is a brief comparison of offline and online application processes.
| Online Application | Offline Application |
| The online application saves time. | The Offline application takes more time. |
| Online applications can be done easily from anywhere. | The application process is difficult in offline applications. |
| There is a lack of personal guidance in online applications. | Personal assistance is available in offline applications. |
| In online applications, documents can be uploaded quickly. | In offline applications, the applicant must submit the documents at the bank. |
| Online application is done only through good internet connectivity. | No type of internet is required for offline applications. |
Conclusion:
NRI home loan is a beneficial option for NRI for property investment in India. It offers convenience and property protection in various ways. Its affordable interest rates, flexible repayment options, long term tenure and attractive loan amount make it very convenient for them.
