Things To Remember If You Are Applying For NRI Home Loans

The home loan application process is indeed challenging. You have to follow the lender’s protocol strictly to get your loan sanctioned. You need to be able to show your eligibility, income and all the necessary documents to get the loan processed. If you are an NRI applying for the loan, the process can be a little more complicated, especially if you are applying for the loan while you are based abroad. So, we’ve highlighted some important points that NRI home loan applicants should remember before sending out their loan application.

• You need to have a resident Indian co-applicant

One of the most basic things you need to remember when you apply for NRI home loan is that your loan application as an NRI borrower is considered only when you co-apply for the loan with a resident Indian. The resident Indian may either be a co-applicant, a co-borrower or a co-owner of the property being purchased through the loan. Your loan application may not be approved in the absence of a resident Indian co-applicant.

• You need to check the lender’s eligibility criteria

NRI home loan eligibility criteria are different from those laid out for resident applicants. For instance, you need to be at least 23-35 years old to be eligible for the loan. You should also be able to show stable employment and regular income in your overseas bank account. Typically, you need to be earning approximately USD $42,000 per annum or its equivalent if you are applying for a home loan, while residing as an NRI in countries like USA, Canada, and Australia, New Zealand or any European or South East Asian country. You can also get loans if you are living in Middle Eastern countries. However, most lenders generally don’t provide loans to NRIs living in countries like Pakistan, Sri Lanka, Bangladesh, Nepal etc. So you must check with your lender, before applying. 

• The loan application procedure

Before you send out your NRI housing loan application to a particular lender, you need to compare the different lenders online. Since it is not always possible for NRIs to be physically present in India while applying for the loan, most lenders allow you to send the loan application online. You can fill the loan application form and attach scanned and attested/notarised copies of your documents with your online application.

• The role of your power of attorney

Assigning a Power or Attorney is an important aspect of the NRI house loan eligibility criteria. Your co-applicant may serve as your PoA, but should typically be a family member. NRIs applying for the home loan need to visit the Indian Embassy in the country they are residing in and take the PoA format from your chosen lender. You need to adhere to the definitive PoA format of your lender and sign the document in favour of the Indian co-applicant and get the Indian Embassy to put their seal of approval.

• Flexibility and prepayment

While applying for NRI home loans, it is always better to opt for loans at floating interest rates as opposed to fixed interest loans, since fixed interest rates are typically higher and attract foreclosure charges if you decide to switch lenders later. You may also prepay the loan, but you need to calculate if prepayment is worth it and if it will actually amount to any real savings.

So, if you intend to apply for an NRI housing loan, ensure you remember these above mentioned points. If you have any doubts during the application process, you can directly correspond with your chosen lender via e-mail.