Best NRI Home Loans – Comparison & Review

This Article was fact checked and last updated for accuracy on December 3, 2024 by Mani Karthik

If you’re looking for an NRI home loan, you’re in luck. 2016 is looking good for NRIs for buying property in India. Things have changed a lot from previous years and Indian banks are offering more home loan offers than ever for NRIs. Everything from interest rates to process of applying for a home loan have changed last couple of years. In this article, I’ll review all the home loan offers for NRIs from Indian banks, compare and review them so you can make an easy choice.

Related: Investment opportunities for NRIs in India.

Home Loans for NRIs – Things To Know

Before going into the details of each home loan offer, let’s discuss and understand some basic things about home loans for NRIs. Owning a home is a dream for many NRIs right from the day they start their career abroad. In my experience, every NRI I meet, has plans to buy a house or property in India some time or the other. So, how is buying property different for NRIs? Is it different from folks in India? How easy is to apply for home loans from abroad? Can NRIs apply for home loans from abroad? We’ll answer all these questions in this article today.

Who is an NRI as defined by banks?

Firstly, you got to understand who an NRI is, as defined by the banks. According to the RBI, anyone who holds and Indian passport but resides abroad for work, temporary employment or business is an NRI or Non Resident Indian. They could be abroad for work on their own or as designated by the government. So, most of us who’re working abroad on H1, L1 (and other employment visas) qualify as NRIs.

What properties are eligible for NRI home loans?

So, what properties can an NRI buy in India through a home loan scheme? Apartments, land, properties under construction, houses, owned plots and reconstruction of existing property qualifies for NRI home loans. Certain banks have exceptions on certain kind of properties (land, reconstruction etc). You should always check with the bank before applying.

How much money can NRIs get through home loans?

Different banks have different policies on this but most of them follow a similar rule. Typically, NRIs can get up to 80-85% of the value of property. That is, if the property is valued at say, INR 80,000, then an NRI can get up to INR 64-68,00,000 as home loan. Some banks also allow maximum amount of loan based on your income and allow up to 40-50 times your annual income. So, let’s say your annual income is $100,000, then you can avail up to $40,00,000 as home loan. In most cases, these are the maximum amount and banks try not to max it up when allowing loans.

Also, many banks will consider your visa status, type of job, educational qualification, location, dependents, other debt, income history, age of employment etc when deciding amount of loan allowed. Especially, when you are applying for home loan as a new customer, your chances of getting a maximum amount depends on more factors.

Related: Best banks in India for NRI account

How long can NRI home loans be?

Tenure of NRI home loans is different from regular home loans. The reason being instability. Typically 10 – 15 years is acceptable by banks but beyond 15 years is tough and you’ll have to convince banks to extend the tenure. I’ve seen in certain cases, that the tenure goes up to 30 years, but in those cases, the property value was either comparatively low or the applicants were long time customers of the banks and they knew the customer well. But this is not a thumb rule.

What are the normal NRI Home loan interest rates?

This is probably the most popular question I get asked. Well, the answer is that your interest rate depends on various factors and there is no common interest rate. Banks look at various factors such as employment history, visa status, property value etc to decide what interest rate to charge. The fact is that, since the risk factor is higher for NRIs, banks tend to charge more in interest rate as compared to regular home loans. However, I’ve seen most NRI home loan interest rates range anywhere from 8 – 13%, 8 being very good and 13 and above being risky.

Who can apply for NRI Home loans?

Anyone who is an NRI and living abroad with current status (incoming salary) can apply for a home loan in India.

Documents required to apply for home loans

NRIs will be put to stricter checking when applying for home loans as compared to regular loan applications. Documents required are – Passport, Visa status, Salary statements, Bank account statements, local address proof, cheque books, Identity proof etc. This will vary from bank to bank.

Other requirement for NRI home loans

One other important factor to know when applying for an NRI home loan is that you have to have an NRE or NRO account from which funds can be transferred against repayment of loan. No other accounts can be used (checking/savings etc).

NRI Home Loans – Bank Comparison

Let’s compare NRI home loan rates by each bank.

	ICICI	Axis Bank	Bank of Baroda	HDFC Bank	SBI
Loan Type	Fixed & Floating	Fixed & Floating	Floating	Fixed & Floating	Fixed & Floating
Interest Rate	9 – 13%	9 – 11%	9 – 11%	9 – 12%	8 – 11%
Processing Fee	0.50%	1.00%	0.00 %	0.50%	0.13%
Max: Loan Amount	80%	90%	80%	75%	80%
Max: Loan Tenure	15 Years	25 Years	30 Years	20 Years	25 Years

State Bank of India (SBI) NRI Home Loans

Loan Type – Floating
Interest Rate – 9 – 11%
Processing Fees – .13% up to Rs. 10,000 (75 Lakhs and above)
Tenure of loan – Up to 25 Years Maximum
Maximum loan amount – Up to 85% of property value

Eligibility for SBI NRI Home Loans

– Existing NRE/NRO account holders.
– NRIs who have worked for minimum 2 years abroad.
– Minimum 18 years of age with regular income source.

Home Loan Scheme Details – State Bank of India has four type of NRI home loans.

a) SBI NRI Home Loan (Regular) – This type of home loan is applicable for those who have finalized the property (apartment, already built house, villas etc). You have to get a value estimate from the builder and present it to the bank. Based on the price estimate, rest of the details will be decided. This is good to get the best interest rate. (Rates as mentioned above)

b) SBI Maxgain (Home loan as an overdraft)
I this scheme, home loan is sanctioned as an overdraft with the added flexibility to operate the home loan account like savings or current account. Cheque book and Internet banking facility is also provided along with this and you may park your surplus funds / savings in Maxgain account, with an option to withdraw funds whenever required. This is good for NRIs who have surplus funds to use against a home loan.

c) SBI Realty – NRI Home loans for buying land/house construction
This home loan scheme is available for NRIs who wants to buy a piece of land or construct a house. You can get up to 85% of value of the land or house but the construction has to start within 2 years of loan sanctioning.

d) SBI Pre Approved Loan
In this loan scheme, you will get a pre-approved amount of loan based on your income not on the property. You will have to take the pre-approved loan statement to builders/property owners and find the right property. Pre-approved loans are valid only for four months by the way.

ICICI Bank NRI Home Loans

Loan Type – Fixed or Floating
Interest Rate – 9 – 13%
Processing Fees – .50%
Tenure of loan – Up to 15 Years Maximum
Maximum loan amount – Up to 80% of property value ( or 5 Crores)

Eligibility for ICICI Bank NRI Home Loans

– Existing NRE/NRO account holders.
– NRIs who have worked for minimum 2 years abroad.
– Minimum 18 years of age with regular income source.

ICICI Bank’s NRI home loans are a bit more easier to get. Minimum requirement for NRI’s are one year work history, 25 years of age and valid documentation. They allow loan for more amount (if eligible, even up to 5 crores INR) but interest rates can be slightly higher than SBI (sometimes up to 13%). ICICI provides loans to self employed individuals as well, but you have to be working abroad for a minimum of 3 years. For bachelor degree holders, the maximum loan tenure time allowed is 10 years while for post graduates loan tenure can be even 15 years, if eligible. Unlike SBI, ICICI Bank doesn’t have any home loan option towards pre-approved home loans. You will have to have selected your property first and paid your part of the funds for bank to disperse the remaining amount to the builder.

Note: I’ve heard several accounts both online and personally, where ICICI bank have charged customers with hidden charges and how the process itself has turned out to be painful. They are however, very easy to approach and initiate the process.

HDFC Bank NRI Home Loans

Loan Type – Fixed or Floating
Interest Rate – 9 – 12%
Processing Fees – .50%
Tenure of loan – Up to 20 Years Maximum
Maximum loan amount – Up to 80% of property value ( or 5 Crores)

HDFC have been in this game since long and is often seen as the authority in home loans. Their products are not as flexible as SBI, but reviews say that they are pretty deviant in their policies. However, there have been several complaints that HDFC take a lot of time (more than what is promised) in granting the loan. Perhaps because of several internal approvals involved.) While ICICI and some other banks are aggressive with their NRI home loan products, HDFC takes a conservative approach mostly.

Axis Bank NRI Home Loans

Loan Type – Fixed or Floating (Different schemes to choose from)
Interest Rate – 9 – 12% (Fixed rate – 11.75%)
Processing Fees – 1% (Minimum INR 10,000)
Tenure of loan – Up to 25 Years Maximum
Maximum loan amount – Up to 80% of property value ( or 5 Crores)

Axis banks offers several creative home loan schemes for NRIs with flexibility. Their processing charges are higher than ICICI bank or SBI, but there are different options to choose from. Here are some of their home loan products for NRIs.

a) Axis Bank Happy Ending NRI Home Loan
In this scheme, if you keep paying your EMIs without fail, the bank will waive off your last 12 months EMIs. Just make sure that your repayment track record is clean, i.e., only 3 instances where dues are pending for 30 days and above but never over 90 days during the life of the loan. The minimum tenure at the time of disbursement needs to be 20 years. You can also part pay your loan, as long as the loan tenure does not fall below 180 months.

b) AXIS Bank Empower Home Loans
This home loan scheme is for NRIs who are self-employed. Again, a rewarding home loan scheme where you can get better rates if you repay properly. Interest rates revolve around the 9 – 12% and will depend on your credentials.

Generally AXIS bank is very flexible with it’s products and will even come to your doorstep. They offer a lot of comfort for customers even though their processing charges are higher.

Bank of Baroda NRI Home Loans

Loan Type – Floating (Fixed not available)
Interest Rate – 9 – 11 %
Processing Fees – 1%
Tenure of loan – Up to 30 Years Maximum
Maximum loan amount – Up to 90% of property value

Bank of Baroda provides fast home loans for NRIs (in 6 days they promise) with no fixed rate option.

Citibank NRI Home Loans

Loan Type – Floating & Fixed
Interest Rate – 9 – 13 %
Processing Fees – 1%
Tenure of loan – Up to 30 Years Maximum
Maximum loan amount – Up to 80% of property value

Summary & Recommendation

If you’re an NRI and is looking for a home loan from an Indian bank, research well and prepare for it well in advance. Most banks give loans if the property is already selected, and it’s easy to get things started if you have clarity on how much the property is valued at. If not, certain banks like SBI and Bank of Baroda gives pre-approved loans but their interest rates differ. Be prepared with your documents like IDs, salary statement, bank transactions etc and go shopping to different banks to get their interest rates. Not all banks provide floating interest rates, but a few do. If possible, try to get a floating interest rate, as it is better. Negotiate with the bank for better rates, as many of them do have some room for negotiation, but they will never reveal or publish it until your really press.

Keep in mind that getting a home loan is not the problem. If anyone says that you should take an offer which comes first, they are wrong. You should wait and get the best deal. Never show urgency to the sales person or he will never go down on the rates as it’s your need now. Instead, plan early and shop around getting all your options from different banks on paper. Use those rates to show to others and negotiate further to get lower interest rates.

Remember, that tenure or EMI is not the big deal but interest rate is. Many people think that getting lower EMIs are better and settle for it, but they don’t realize that when EMIs lower, actual interest rate goes up. And in the long run, you’re losing money. Don’t let that happen. Always ensure that you get the best interest rate.

Also, getting things done fast doesn’t mean anything. Many new-generation banks focus on getting things done easily and effortlessly, so much that they will come to your doorstep to fill up forms. Don’t fall into this trap. While they are making things easier, their processing fees are ridiculously high. Think long term and always check if how things will change in the future if there are any problems. Let’s say you fail to make a payment – what happens then? Would you be charged extra? If yes, what is that amount going to be? Will it affect my interest rate? These are the type of questions you should ask the sales representative.

Better yet, do not trust everything the sales representative says, until he shows proof of written document. Sales representatives have targets to achieve, after which they don’t have any commitment to you. So, they will always try to push you to sign the deal and get away with it. Never let that happen. Always visit the bank and if possible, talk to a higher authority and get everything in writing, not verbal promises.

There have been many instances reported with almost every bank, about processes getting delayed and promises taken back. This is due to lack of communication of misunderstandings. Always read the fine print and ask the bank tough questions. Make sure you get the best deal!

All the best.