How NRIs Can Take Home Loan in India? Eligibility & Procedure 2025
NRIs Home Loan in India 2025: Eligibility, Process & Key Requirements
Indians live all over the world, but their bond with their native land is as strong as a mother’s bond with her child. This deep connection often inspires many NRIs (Non-Resident Indians) to invest in property back home, as owning a piece of their homeland brings them a sense of peace and belonging.
However, not everyone has a significant amount of savings. The good news is that living abroad sometimes gives NRIs the flexibility to buy property through EMIs (Equated Monthly Installments).
But here’s the challenge: Taking out a home loan in India is a complex process, even for Indians living within the country. So, for NRIs, the process can seem even more daunting. In today’s blog, we’ll discuss whether an NRI can take a home loan in India, and if so, how they can go about it.
Can an NRI get a home loan in India?
Yes, an NRI can take a home loan in India, but for that, he or she has to fulfill various eligibility criteria. Additionally, there are certain rules and regulations imposed by the Indian government that must also be fulfilled if you want to own property here. But before that, you have to be eligible to become an NRI.
Who is considered an NRI in India?
There are two definitions of NRIs in India. One is under the Foreign Exchange Management Act (FEMA), and the second is under the Income Tax Act, 1961. As per FEMA, if you live outside India for 182 days or more in a financial year or for an indefinite period of time for employment, business, or other purposes, you are considered an NRI.
As per the ITA, you are considered an NRI if you have been in India for less than 182 days during the financial year, or if you have spent less than 60 days in India during the financial year and less than 365 days in the preceding four years.
Eligibility Criteria for an NRI to take home loan in India
To be eligible for a home loan in India, the borrower must meet certain criteria. The minimum age requirement is 23 years, while the maximum age limit is 60 years. Most lenders also require applicants to have a minimum work experience of at least three years.
Additionally, the borrower must have a minimum annual income of Rs 2.5 lakh or more. As for the type of property, the loan can be availed for all kinds of properties, excluding agricultural land, farmhouses, and plantations.
Documents required
NRI Home Loan interest rate
Loan Repayment procedure for NRIs in India
If you have invested in an under-construction property, you will have to pay only the interest until its completion. However, if you wish to start repaying the principal as well, you may opt to tranche the loan and begin paying the full EMIs.
If you have invested in a property for which you have received possession, your EMI payments will commence immediately. All EMI payments must necessarily be made through your NRE/NRO bank account in India.
There is no penalty for prepayment of partial or full outstanding loan amounts paid from your own sources. However, your home loan may attract prepayment charges if you are refinancing it with another financial institution in India.
Tax Deductions for NRIs on Home Loan Repayment
In India, individuals who pay income tax can claim deductions for their home loan repayment. Under Section 80C of the Income Tax Act, you can claim up to Rs 1.5 lakh for principal repayment. Additionally, under Section 24(b), you can claim up to Rs 2 lakh for home loan interest paid.
Repayment Process
To repay a home loan, NRIs can use their NRO or NRE accounts. However, the repayment must be made in Indian Rupees (INR), even if the money is transferred from abroad.
Co-Applicant Requirement
Many lenders require NRIs to have a local co-applicant for their home loan. The co-applicant shares the responsibility for repaying the loan. In some cases, NRIs may also need to give Power of Attorney (PoA) to the co-applicant to handle the loan process on their behalf.
NRE/NRO Accounts for Repayment
NRI home loans are given in INR. To repay the loan, NRIs must open either an NRE or NRO account with an Indian bank, through which funds can be transferred from abroad.
Final Words
The home loan process for NRIs involves providing required documents, following regulations, and working with trusted financial institutions. By taking the right steps, NRIs can confidently own property in India.
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