Buying a property in India is a beneficial long-term investment as you always have a place to stay when visiting home. Investing in Indian real estate helps you get a great return on investment over time while being connected to your home wherever you go. Fund your dream of buying a home in India by reviewing some great online home loan for NRIs.
Discover more about the eligibility criteria of these loans and the documents you need to apply for an NRI home loan. Also, explore the credit score requirements and the tax benefits of these loans to be thoroughly informed before making an official application.
Documents Required for NRI Home Loans
You need certain documents to apply for a home loan anywhere. Below is a list of these documents you must compulsorily have to be eligible for an online home loan.
- Copy of your visa and Indian passport
- Appointment letter/employment contract/ work permit of your residence country
- Latest payslips for the last six months or salary certificate
- Bank statement of NRO and NRE accounts for the previous year
- Latest income tax returns
- Power of attorney in the bank’s format (when you are not in India to execute the transaction)
- Bureau report of country of residence
Below are the documents you need when your Indian passport is unavailable.
- OCI card if your parents are Indian citizens
- PIO card if you have a foreign passport
NRI Home Loan Eligibility Criteria
Check your eligibility for an online home loan before applying for one. The eligibility criteria for NRI home loans differ depending on different lenders. Below are a few basic requirements needed by every lender.
- Age: 18 to 70 years
- Nationality: Non-Resident Indian
- Employment: A self-employed or salaried individual
Other prerequisites factored in by the lender can be your credit history, age during the application, monthly income, retirement age, and other aspects. Many lenders also need you to have a local co-applicant to apply for a joint loan.
CIBIL Score Requirement for NRI Home Loan
Your credit score is an important aspect of getting an online home loan, and it is an indicator of your creditworthiness and how you have handled your finances in the past. A credit score of 900 can easily get you approval for the NRI housing loan. But a score above 750 will also get you approval and favorable home loan rates. Credit scores are important for more than just loan approval; they are also important to get convenient terms and conditions. These CIBIL scores reflect whether a lender can trust you to repay your borrowed funds.
Tax Benefits of NRI Home Loans
NRIs are eligible for tax benefits on their online home loan under Section 80C of the Income Tax Act 1961 if they file their income tax returns in India. The tax deduction is for your housing loan’s principal and interest component. Avail the following tax benefits on your loan if the home you took the loan for is vacant in India.
- Principal Component
Up to Rs. 1.5 lakh deduction on the principal amount repayments.
- Interest Component
Up to Rs. 2 lakh deduction on the interest amount repayments.
The interest payable component can be taken as a tax deduction on your housing if you rent your purchased property.
NRI Home Loan Rates
An NRI housing loan comes with an interest rate like any other loan and will differ depending on the lender from which you are getting the funds, your credit score, and other factors. Pay your interest according to the decided rate, which will be conducted in the Indian currency. You may also be asked to open a Non-Resident Ordinary (NRO) or Non-Resident External (NRE) account with an Indian financial institution or bank. Use these accounts to repay your loan and transfer your foreign earnings.
Conclusion
Get the best online home loan to buy your dream property in India. But before beginning with the loan application process, ensure that your documents and credit score are in proper order. These simplify the process and make it considerably hassle-free. Compare different NRI housing loan offers to get the best one with competitive interest rates and favorable terms and conditions.
