Many NRIs living overseas wish to invest in a real estate property in India and apply for a home loan to get the necessary funds. But, the process involved in an NRI home loan is different from the process for locals. Read on to know more about it.

Several NRIs (Non-resident Indians) who live abroad wish to buy a home back in their native land, India, to stay connected with their family or settle down post-retirement. No matter your reason for investing in a property, as an NRI, you can get the necessary funds for the purchase by applying for an NRI home loan. 

In India, many lenders offer NRI home loans. You can find attractive offers from nationalised banks and NBFCs (non-banking financial companies). You must know that the process for an NRI home loan is different from the loan offered to local residents. So, before you start the loan application process, it is advisable that you get acquainted with different aspects of the NRI home loan like eligibility criteria, documents required, charges involved. 

If you are a first-time home loan applicant, the following tips will help you ease through the NRI home loan process. 

Eligibility criteria for NRI home loan

The eligibility requirement for an NRI home loan may vary from one lender to the other. But most lenders have the following requirements:

• You must be aged between 18-65. 
• You must hold a valid passport.
• You must be a salaried employee or a self-employed professional with a regular source of income.
• You can apply for a home loan to purchase a new ready-to-move-in home, or you can get the funds to construct a home on the piece of land that you own.
• You can apply for an NRI home loan alone or jointly with one or more than one co-applicant(s). The co-applicant must be an NRI. Another important thing to know about a joint NRI home loan is that all the applicants need not necessarily contribute towards loan repayment, but they must sign the documents. 

Documents required for NRI home loan

Like the eligibility requirements, the documentation for an NRI home loan differs from lender to lender. But, some of the basic documents you may need include –

• Proof of identity
• Proof of residence in India and overseas
• Copy of passport and valid visa
• Work permit
• ID card issued by the employed overseas
• Passport-size photographs
• Property related documents
• A cheque to pay the processing fee

What is the maximum amount that the NRIs can borrow?

Generally, the financial institutions in India that offer home loans for NRI approve a maximum of 90% of the property’s value as a home loan. You must pay the remaining amount from your pocket. This is called a down payment, and you must pay this amount upfront when you apply for the loan. 

Are NRIs eligible for home loan tax benefits?

Yes, the tax laws allow the NRIs to avail of tax benefits on home loans availed in India. The principal amount you repay is eligible for tax benefit under Section 80C of the Indian Income Tax Act to a maximum limit of Rs. 1.5 lakhs in a financial year. Additionally, as an NRI, you are entitled to get tax benefit on the interest repayment up to Rs. 2 lakhs in a financial year. 

Make your dream of being a homeowner a reality with an NRI home loan

Today, with many lenders willing to provide NRI home loan, getting the funds for buying your dream home has become easier than before. You can compare the offers from different lenders online and choose the right lender.