Recent technological advancements have made the world a much smaller place. An increasing number of Indians are migrating abroad for jobs, business, and other reasons. However, purchasing a property in your homeland lets you stay connected to your native place. You can keep this house for occasional visits or return here after retirement. You can easily get a Home Loan to finance the purchase.
If you plan to purchase a home in India with a Home Loan for NRIs, you can use a Home Loan calculator to calculate your eligibility and EMIs. Here is some key information NRIs should know before applying for housing finance in India.
Difference Between Home Loans for Indian Residents and NRIs
The major points of difference between the two Home Loan options are as follows:
| Parameter | Home Loan for Indian Residents | Home Loan for NRIs |
| Accessibility | For Indian citizens | For Non-Resident Indians |
| Tenure | Longer up to 20 years | Shorter between 5-15 years |
| Interest Rates | Lower Home Loan interest rate for resident Indians | Higher Home Loan interest rate for NRIs |
| Documents | Basic KYC documents | Additional documents are required, such as a passport, NRO or NRE account statement, employment contract, work permit, visa papers, and general power of attorney |
| Repayment Method | Through a regular savings account | Through an NRO and NRE account in Indian rupees, with remittances from abroad |
Eligibility for an NRI Home Loan
Your eligibility for a Home Loan for NRIs depends on your repayment capacity. The conditions you must fulfil to apply for a loan at Kotak Mahindra Bank include the following:
-
- Minimum Education Qualification: Graduation
- Employment: At least three years
- Maximum Age: 58 at the time of loan maturity
- Annual Gross Salary (after Currency Conversion):
- For a tenure up to 5 years, Dirhams 36,000 for Gulf Countries and USD 20,000 for Merchant Navy
- For a tenure of 5 to 15 years, USD 42,000 for the USA, UK, and other countries excluding the Gulf, Dirhams 48,000 for Gulf Countries, and USD 26,000 for the Merchant Navy
You must receive the salary weekly, fortnightly, or monthly basis through Cheque or Direct Bank Credit, not Cash.
Documents Required to Apply for a Home Loan for NRIs
If you are an NRI meeting the above eligibility conditions, submit the following documents to apply for a Home Loan for NRIs at Kotak Mahindra Bank:
- Photograph
- Identity proof
- Address proof
- Age proof
- Bank statements for the last six months
- Copy of contract, appointment letter or employment letter
- Power of attorney
- Salary certificates
- Copy of the work permit, passport, valid visa, and business details, if any
Appointing a Power of Attorney holder
NRIs purchasing a property in India with a Home Loan must appoint a relative as a Power of Attorney holder. The POA holder acts on your behalf for property and Home Loan-related matters without your physical presence. Appointing an authorised person will save you significant time and effort throughout the loan term.
Applicable Tax Deductions
If you are a non-resident taxpayer in India, you can save money on taxes by claiming the following applicable tax deductions:
- Claim a deduction of up to Rs. 1.5 Lakh on the loan principal repayment under Section 80C of the Income Tax Act, 1961.
- Claim a deduction of up to Rs. 2 Lakh on the loan interest repayment under Section 24 of the Income Tax Act, 1961.
- NRIs borrowing a Home Loan to buy their first home can claim an additional deduction of up to Rs. 50,000 on loan interest repayment under Section 80EE of the Income Tax Act, 1961.
Repayment Tenure
While resident-Indian Home Loan borrowers can repay the loan in a tenure of up to 20 years, NRIs have a shorter period for loan repayment, ranging from 5 to 15 years. Using a Home Loan calculator helps select a suitable tenure with budget-friendly EMIs. It calculates the monthly instalments based on your Home Loan interest rate, loan amount, and repayment tenure.
Borrowing a Home Loan for NRIs is no longer difficult if you complete all the formalities and fulfil the lender’s eligibility and documentation requirements. Apply for a Home Loan for NRIs at Kotak Mahindra Bank and enjoy the benefits of attractive Home Loan interest rate and flexible repayment tenure. You can also repay the loan before the term ends without paying any extra charges on floating-rate loans.
Table of Contents