NRI Home Loan
Most lenders offer home loans to NRI applicants for purchase, construction or renovation of property in India. With digital processing and NRI centric loan offerings, NRIs having a strong credit profile can apply for home loans from abroad.
Overview
Most lenders offer home loans to NRI applicants for purchase, construction or renovation of property in India. With digital processing and NRI centric loan offerings, NRIs having a strong credit profile can apply for home loans from abroad. They can also avail tax benefits on home loans availed from India. The interest rates are usually the same as those offered to regular home loan borrowers, with a few lenders offering slightly higher interest rates. They can take consultation with Tax Intelligence to compare interest rates and loan offers from multiple lenders and opt for the lender best suiting their requirements.
Highlights of NRI Home Loan
Eligibility Criteria of NRI Applicants Availing Home Loan
Below mentioned is the home loan eligibility criteria set by the lenders for their NRI applicants.
Indian citizens holding valid Indian passport and residing and working abroad are eligible for NRI home loans.
Minimum age of the applicant should be 21 years at the time of loan application and maximum age should be 65 years at the time of loan maturity.
Salaried employees with atleast 1 year of work experience abroad and self-employed individuals with a minimum experience of 3 years in current business are eligible for NRI home loans.
Note that, the eligibility criteria varies from lender to lender. Therefore, NRIs must check their eligibility before applying for home loans to increase their chances of loan approval.
Documents Required
Below mentioned are the home loan documents required by the lenders to be submitted by NRIs during loan application.
- Duly filled application form with passport size photograph.
- KYC documents - Passport, NRI status proof (VISA/OCI card/Residence permit)
- Communication address proof
- PAN card (mandator for NRI)
- PAN/Form 60 (for OCI)
- Income proof - Salary slip/certificate for last 1 month, overseas bank statement with salary credit for last 3 months
- Business proof - P&L statement and ITR for last 2 years, business incorporation documents, details of overseas operative bank account for last 6 months, office address, list of directors, shareholding pattern, etc.
Note that, the documents vary from lender to lender. Therefore, applicants should ask for the list of documents from the respective lender before loan application to speed up the approval process and reduce the chances of loan rejection.
Tax Benefits on NRI Home Loans
NRIs can avail the same tax benefits on home loans as Indian citizens under the Income tax Act 1961, on principal and interest payments made on home loans. The tax benefits are explained below:
- Under Section 24(b) - NRIs can claim a tax deduction of up to Rs. 2 lakh on the interest component of their home loan per financial year.
- Under Section 80(C) - NRIs can also claim a tax deduction of up to Rs 1.5 lakh per financial year on the principal amount.
- For joint home loans - In case the property is jointly owned by your earning spouse, both can claim deductions on the principal and interest component separately. Thus, they can avail tax benefits of up to Rs. 7 lakh per financial year.
- For first time home buyers - First time home buyers can avail an additional deduction of up to Rs. 50,000 under Section 80EE and up to Rs. 1.5 lakh under Section 80EEA.
Tips for NRIs Applying for Home Loans
NRIs applying for home loans can follow the below-mentioned tips for hassle free loan processing.
- Maintain a strong credit score.
- Compare multiple lenders on fintech platforms.
- Make a higher down payment.
- Check your eligibility before loan application.
- Use home loan EMI calculator to assess your financial stability and opt for a loan amount accordingly.
- Check for pre-approved offers on home loans.
- Make part-prepayment whenever you have surplus funds.
- Opt for the right loan tenure.
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