NRI Home Loans for Property Investment in India

June 06, 2024 in Property Guide

NRI Home Loans for Property Investment in India

If you are a Non-Residential Indian considering purchasing a property in India, understanding the differences of NRI home loans is crucial. From eligibility criteria to interest rates and a checklist for documentation, let's take you through the essentials of NRI home loans.

What Are NRI Home Loans?

Imagine you're an NRI (Non-Residential Indian), living and working abroad, but you've always dreamt of owning property in your homeland. That's where NRI home loans come into play, unlocking the doors of Indian real estate for you.

  • Financial Instruments for NRIs: NRI home loans are special financial tools designed exclusively for individuals living abroad wishing to invest in property back home in India. This is a specific financial instrument for NRIs to make your dream of owning property in India a reality.
  • Customised for Unique Needs: NRIs often face different circumstances and needs compared to residents living in India. These loans are designed to meet your requirements as an NRI.

NRI home loans act as your financial ally, providing the necessary funds to make property ownership in India a part of your reality.

How Do They Work?

NRI home loans work similarly to regular home loans, but they're adjusted to suit your status as a non-residential Indian. The application process considers factors like your income abroad, employment stability, and other aspects relevant to your unique situation.

  • Property Ownership: The primary perk of NRI home loans is that it opens doors for NRIs to own property in India without being physically present.
  • Tailored to Your Reality: These loans understand the challenges and advantages of being an NRI. The terms and conditions are developed to accommodate your specific needs.
  • Bridge the Distance: NRI home loans act as a bridge, connecting you to your roots. It's not just about buying property; it's about staying connected to your homeland.

Considerations for NRI Home Loans

  • Legal Compliance: Make sure you are aware of all legalities and comply with regulations related to property ownership by NRIs.
  • Currency Exchange: Consider the currency exchange rates, as you'll be transferring foreign currency to India for loan repayment
  • Research Lenders: Research financial institutions to find the one that best suits your needs.

Eligibility Criteria for NRI Home Loans

To qualify for an NRI home loan, certain eligibility criteria must be met.

  • NRI Status: As the name suggests, only Non-Residential Indians are eligible. This includes Persons of Indian Origin (PIO) and Overseas Citizens of India (OCI).
  • Age Criteria: Typically, lenders have a minimum and maximum age limit for loan applicants. The age limit varies among financial institutions.
  • Employment Stability: Consistent employment is a key factor. Lenders often require a minimum number of years of employment or business stability.
  • Income: Your income abroad is a crucial factor. Lenders assess your repayment capacity based on your current income.

NRI Home Loan Document Checklist

Ensure you have the necessary documents ready. Here's a checklist:

  • Proof of Identity: Passport, OCI/PIO card.
  • Proof of Address: Utility bills, rental agreement, or any other valid document.
  • Income Proof: Salary slips, employment agreement, and income tax returns.
  • Property Documents: Sale agreement, title deed, and other property-related documents.
  • Bank Statements: Both domestic and international.

=> Read Also:- Types of Residential Properties: Which one is Better Investment?

Understanding Loan-to-Value Ratio

It is important to understand the basics of the LTV Ratio to understand how the process works.

1. What is the Loan-to-Value Ratio?

The Loan-to-Value (LTV) ratio represents the proportion of a property's value that banks or housing finance companies (HFCs) can finance through a home loan. It indicates how much of the property's cost can be covered by the loan amount.

2. Calculation of LTV Ratio

The LTV ratio is crucial because it determines the maximum loan amount a borrower can receive based on the property's value. LTV ratio is expressed as a percentage. It is calculated by dividing the loan amount by the property's market value and multiplying it by 100. For example: If the property value is ₹1 crore and the loan amount approved is ₹75 lakhs, the LTV ratio would be:

LTV= (Loan Amount/Property Value)×100 = (75,00,0001,00,00,000)×100=75%

3. LTV Ratios for NRI Home Loans

The common LTV ratios for NRI home loans in India are as follows:

  • Up to ₹30 lakhs: Up to 90% of the property value.
  • ₹30 lakhs to ₹75 lakhs: Up to 80% of the property value.
  • Above ₹75 lakhs: Up to 75% of the property value.

4. Impact of LTV on Down Payment

  • The borrower is required to make a down payment (the remaining amount after the loan) based on the LTV ratio.
  • The higher the LTV ratio, the lower the down payment required.
  • Conversely, a lower LTV ratio means a larger down payment.

5. Considerations

  • A higher LTV ratio implies more risk for the lender, which may lead to a slightly higher interest rate.
  • Factors such as the borrower's credit score, income, and property location also influence the LTV ratio.

Interest Rates for NRI Home Loans

Fixed Vs. Floating

Let's talk about interest rates – the spice in your financial stew. NRI home loans offer two main types: fixed rates and floating rates.

  • Fixed Rates

Fixed rates remain constant throughout the loan period. This ensures that you need a fixed budget to meet your monthly payments.

  • Floating Rates

Floating interest rates can change based on market conditions. The banks can change your loan interest rates if you have opted for a floating interest rate.

Choosing Between Fixed and Floating Rates

If you want to know your monthly payments from the start, fixed rates should be your preference. If you opt for a floating interest rate, it should depend on your assessment of floating rates remaining the same, marginally increasing or decreasing. It should also factor in your capacity to take risks and support payments in case of a rate hike.

What are the Dos and Don'ts for NRI Home Loan Borrowers?


  • In-depth research: Before committing to an NRI home loan, research the terms, interest rates, and fees to help you make informed decisions.
  • Maintain a good credit score: Your credit score is a report card of your financial behaviour. A higher credit score is extremely advantageous when applying for a home loan. A good credit score increases your chances of getting a loan with good conditions.
  • Work with reputable lenders: Choose well-known and trusted financial institutions for your loan needs.


  • Overlook the Fine Print: Don't skip the details! Read every word of your loan documents. The fine print contains important information and conditions. It's like reading the terms and conditions of a game – you want to know the rules to play it right.
  • Neglect Financial Planning: Don't dive into a loan without looking at your wallet first. Assess your finances realistically. Make sure you can comfortably handle the loan. It's like budgeting for a trip – you wouldn't plan a vacation without checking your savings first.

=> Read Also:- Process of Owning Property by NRI in India


Navigating NRI home loans involves understanding eligibility criteria, document requirements, and choosing the right financial product. By adhering to dos and don'ts and considering the Loan-to-Value ratio, NRIs can make informed decisions. If you are considering investing in any of the following cities — Mumbai, Pune, Gurgaon, and Ahmedabad, Adani Realty offers a diverse range of properties. Take a step towards property ownership with Adani Realty. Connect with the team today.

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