How to Apply for a Home Loan in India (for NRIs)

Written By Mani Karthik

I share everything I learned in life on this blog. Everything from personal finance tips to life hacks that'll make you a smarter person. Founded BackToIndia - on a mission to help NRIs move back to India.

Did you know that a fixed interest rate isn’t actually fixed for your entire loan tenure? Yes, it is important to learn the various facts about home loans in India before you apply for one, especially if you are an NRI. With the global finance scenario changing rapidly and the number of banks offering various types of financing options to Indians, it is quite a simple process to apply from a home loan, without needing to be physically present in the country.

However, it is important that you know the eligibility criteria for an NRI applying for a home loan. Some basic perquisites, according to an article in The Times of India, include:

  • Minimum age of the borrower should be above 24 years.
  • You must have an Indian resident as co-owner or co-borrower of the property you are buying
  • You will need to submit salary slips for previous three months and bank statement of your salary account to the lender.

There isn’t any way to escape the paperwork though. And, this is true especially if you are an NRI. So, it is advisable to keep all your important documents handy so as to make this process smoother.

Various banks may request for different documents, although some basic documents that are commonly requested for are your identity and address proof, driving license, PAN card, utility bills, income proof, visa, work permit and your property documents.

Here’s a look at some simple steps you can follow as an NRI applying for home loan in India.

Research

The most important step before making any financial decision, whether you are opening a bank account, buying insurance or applying for a loan, is thorough research. You will find plenty of banks offering loans with different interest rates and benefits. Each bank will also have its own terms and conditions. So, make sure you check all these factors, while also reading customer reviews. If you have any questions, don’t hesitate to call the customer support number.

Select an online platform

There are various online platforms available, where you can submit your application for a home loan. You can choose your lender or allow these platforms to choose the right one for you. They will provide you an option to upload all the requisite documents and then manage the entire procedure on your behalf.

Issue a power of attorney

It is important to issue a power of attorney in name of the person who will be your co-applicant or co-borrower for the loan. This can be a relative or a friend, who is a resident of India.

Visit the Indian embassy in USA

Once you have issued the power of attorney, you need to go to the Indian embassy and collect the format for power of attorney from the lender. There’s a specific format that you need to sign in favor of your co-applicant in India. Then, the officials at the embassy will verify and put a seal on it.

It is important that you know the tenure of your loan before applying. For a salaried person, it is usually about 30 years, while for a self-employed individual, it is 20 years. If you find it difficult to understand the bank’s policies, enlist the help of an experienced professional.

  How to Save Money to Buy a House in India

Personal loan in US to buy property in India

Non-Resident Indians (NRIs) in the United States can apply for personal loans in the United States as long as they meet the lender’s minimum borrowing requirements. One good thing is that personal loans in USA aren’t limited in what they can be used for–as long as the borrower is accepted, they can use the money however they choose, including buying land in India.

Many NRIs use this option to buy property and land in India.

The only catch is that the amount you can take loan for depends on your credit worthyness and credit score and it may not be enough for many NRIs.

For this reason, many NRIs also opt in for private lenders. They usually come with higher interest rates and amounts are usually lesser.

Is taking a person loan in USA to buy land in India a good idea?

Having a backup plan (of buying land in India) for your retirement is always a sensible move. If your Visas don’t work out, you’ll have a backup plan.

Purchasing real estate is an investment that can increase in value over time. The value of the property is obviously affected by the local real estate market. However, because you are purchasing an asset, it has the potential to grow in value over time, offering more long-term value.

Dollars earned in the United States might be used to support your family in India. Make the most of the Dollar’s purchasing power to provide better possibilities for your loved ones back home.

The land you purchase can be used to create revenue. You can rent out the property, build business infrastructure, or even open a factory to supply locals with goods and services. Not only will the property assist in paying for itself, but it may also assist in funding your retirement.

All the best!

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