Non-Resident Indians and Overseas Citizens of India (OCIs) who wish to purchase a residential property in India can get a home loan from banks and housing finance companies in India. NRI home loan interest rates, eligibility criteria, loan amount, documents required, etc. vary from bank to bank. In this article you will find key information about an NRI home loan in India.
Key Features of NRI Home Loan
NRI Home Loan Interest Rates 2023
NRI home loan interest rates vary from lender to lender. The interest rates offered by lenders depend on various factors including monthly income, occupation and credit score of the loan applicant, as well as loan amount and tenure.
Listed below are the interest rates by leading Indian banks:
| Name of the Lender | Interest Rate Per annum (%) |
|---|---|
| SBI NRI Home Loan | 9.15% – 10.05% |
| HDFC Bank NRI Home Loan | 8.45% – 9.85% |
| ICICI NRI Home Loan | 9.25% – 10.05% |
| LIC Housing Finance NRI Home Loan | 9.35% – 10.10% |
| Kotak Mahindra Bank NRI Home Loan | 8.85% – 9.35% |
| PNB Housing NRI Home Loan | – Up to Rs. 35 lakh: 8.5% – 10.65% – Above Rs. 35 lakh: 8.5% – 10.85% |
| Bank of Baroda NRI Home Loan | 8.90% – 11.25% |
| IDFC First NRI Home Loan | – Salaried: 8.85% onwards – Self-employed: 9.25% |
| Bank of Baroda NRI Home Loan | – Salaried: 8.90% – 10.50% – Non-Salaried: 8.95% – 10.60% |
NRI Home Loan Amount
The home loan amount depends on the market value of the property for which you are applying for a home loan. Lenders use LTV (Loan-to-Value) ratio to determine the home loan amount.
LTV (Loan-to-Value) for home loans in India is the maximum amount of loan that can be provided to a borrower as a percentage of the property’s value. In India, the LTV ratio for home loans can vary depending on the lender, borrower’s creditworthiness, and the property’s value.
Typically, most banks and housing finance companies in India offer a maximum LTV ratio of 75% to 90% for home loans. This means that the borrower can get a loan of up to 75-90% of the property’s value, and the remaining amount has to be paid as a down payment. However, the LTV ratio may vary depending on the location of the property, type of property, and other factors.
It is important to note that a higher LTV ratio means a higher risk for the lender, and therefore, the borrower may be required to pay a higher interest rate on the loan. The borrower’s credit score, income, and other factors may also influence the LTV ratio and the interest rate.
The common LTV ratio for an NRI home loan in India is as under, depending on the loan amount:
| Loan Amount | LTV Ratio |
|---|---|
| Up to Rs. 30 lakh | Up to 90% of the property value |
| Rs. 30 lakh to Rs. 75 lakh | Up to 80% of the property value |
| Above Rs. 75 lakh | Up to 755 of the property value |
NRI Home Loan Tenure
The tenure for an NRI home loan in India can vary depending on the lender and the borrower’s age, income, credit score, and other factors. In general, most lenders offer a maximum tenure of 20-25 years for NRI home loans.
However, some lenders may offer a shorter tenure of 10-15 years for NRI home loans, especially if the borrower is older or has a lower income. It is important to note that a shorter tenure may result in higher monthly EMI (Equated Monthly Installment) payments but may reduce the overall interest cost of the loan.
It is advisable to do thorough research and compare the tenure and interest rates offered by different lenders before applying for an NRI home loan in India. Additionally, it is important to consider factors such as prepayment charges, processing fees, and other fees associated with the loan to ensure that the loan is affordable and suitable for the borrower’s financial situation.
Processing Fees and Prepayment Charges
Banks and HFCs charge processing fees from home loan borrowers. NRI home loan processing fee varies from lender to lender, typically ranging between 0.25% and 2.00% of the total loan amount. Moreover, if you close the loan before its tenure, lenders may levy a fee in the form of prepayment charge.
Eligibility Criteria
The eligibility criteria for an NRI (Non-Resident Indian) home loan in India may vary depending on the lender, but some common requirements include:
- Age: The borrower should be at least 21 years of age and not more than 60-65 years of age at the end of the loan tenure.
- Income: The borrower should have a stable and regular source of income, either from employment or business. The minimum income requirement may vary depending on the lender and the borrower’s location and profession.
- Credit score: The borrower should have a good credit score of at least 650-700 or higher. A higher credit score may help in getting a lower interest rate and better loan terms.
- Property type: The property should be eligible for home loan financing, and the lender should be willing to finance the specific property. Certain types of properties such as agricultural land, commercial properties, and some types of residential properties may not be eligible for home loan financing.
- Loan-to-value ratio: The borrower may be required to make a down payment of at least 10-25% of the property’s value, depending on the lender and the property’s location and value. The maximum loan-to-value ratio (LTV) may vary depending on the lender and the property’s location and value.
It is advisable to check with the lender for the specific eligibility criteria and requirements for an NRI home loan in India. Additionally, it is important to do thorough research and compare the interest rates, loan terms, and fees offered by different lenders to choose the best loan option.
Documents Required for NRI Home Loan in India
The documents required for an NRI (Non-Resident Indian) home loan may vary slightly depending on the specific lender and the loan program being offered. However, here are the most commonly requested documents:
- Copy of valid passport and visa
- OCI card issued by the Government of India
- Identity Proof: Passport, Voter ID, Driving License or any other government-issued photo ID.
- Address Proof: Utility bills, bank statement or rental agreement.
- Employment Proof: Employment contract, appointment letter, salary slips for the last six months, and work experience certificate.
- Income Proof: Bank statements for the last six months, Form 16 or Income Tax Returns (ITR) for the last two years, and any other income proof like rent received.
- Property Documents: Sale agreement, allotment letter, approved plan, and property tax receipts.
- Power of Attorney: In case the NRI borrower is not present in the country, the lender may require a power of attorney (POA) authorizing someone to act on their behalf in all matters related to the loan.
- Overseas Address Proof: In addition to the above, some lenders may also require proof of the borrower’s overseas address, such as a utility bill or a driving license.
It is advisable to check with the lender for a comprehensive list of documents required before applying for an NRI home loan.
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