Loan Against Property for NRIs: All You Need to Know

Real estate investments are undoubtedly among the most significant physical assets. Moreover, a  property can be mortgaged with any financial institution to get a loan for business and personal use.

But for an NRI or ‘Non-Resident Indian’, is it possible to get a loan against property in India? Look no further;  we have covered every detail regarding a loan against property for NRI.

Loan Against Property for NRIs

NRIs owning a residential or commercial property can avail a loan against property with an attractive interest rate. The process of availing these loans is similar to Indian citizens availing a loan against property.

Many banks and NBFCs provide these loans to NRIs, including  SBI, ICICI Bank, Axis Bank, Federal Bank, Bank of Baroda, etc.

Highlights Of Loan Against Property for NRIs

• You can use real estate, whether residential or commercial, as collateral
• There’s no restriction on the use of the loan amount. And can be used for both personal and professional needs
• Low-interest rates for NRIs start from 8% per annum. However, this differs from one lender to another
• Longer repayment tenure of up to 15 years
• Both fixed and floating interest rates are available for NRIs
• NRI consumers can get a loan of up to 60-70% of the property’s market value
• You may fill out an online application for a loan against property
• NRIs can jointly apply for a loan against property
• Options for pre-approval loans against properties are available

Eligibility criteria for loan against property for NRIs

Monthly income and the property’s market value are the critical factors that decide the eligibility of an NRI for a loan against property. The other eligibility details are as follows:

NRI’s Profile

• An individual should be a salaried NRI or PIO (Person of Indian Origin)
• NRI should be above 24 years of age at the time of loan commencement and up to the age of superannuation
• Have a valid Indian Passport
• NRI individuals should have regular employment for a minimum of 1 year
• Hold a valid work permit in a foreign country for a minimum of 2 years

Documents Required

Documentation for a loan against property for an NRI differs from one lender to another. Still, the essential documents required to submit to apply for a loan against property for NRI are:

• Duly-filled loan against property application form
• Identity proof: Passport/Aadhaar card/driving licence/voter’s ID card/ government- issued photo ID. A passport should contain the relevant visa stamps
• Valid visa or work permit copy/OCI (Overseas Citizen of India) card
• PAN card
• Last six months’ NRO or NRE account statements
• Last six months’ international salary account statement
• Signature proof: PAN card/birth certificate/passport/SSC mark sheet
• Income proof: Last three months’ salary slips for the salaried applicant and two years’ ITR, computation of income, Profit & Balance sheet verified by CA/ Tax Audit Report for self-employed applicants.
• Other documents, as asked by the lender at the time of the loan application

Power of Attorney In NRI Loan Against Property

An Indian resident can receive a power of attorney and act as a co-applicant in the loan against property for NRIs. The resident works on behalf of the NRI applicant and looks after the property and property-related matters when the NRI is absent. Indian citizens between 24 to 60 years old can get a power of attorney.

Leading Banks Offering Loans Against Property for NRIs

Many banks in India offer NRI LAP loans with attractive interest rates and minimal documentation. In addition, NRIs with the commercial or personal property can apply for a loan.

Let’s look at some of the leading banks for a loan against property for NRIs.

State Bank of India

SBI offers a loan against property for NRI up to ₹7.5 crore with an interest rate starting from 1.45% + 1 yr MCLR to 3% + 1 yr MCLR. The repayment schedule can be as long as 15 years, based on the loan amount. 

Axis Bank

Axis Bank offers a loan against property starting from ₹5 lakh for NRIs. The bank charges an interest rate starting from 11% per annum. The loan repayment tenure can go up to 15 years.

Bank of Baroda

Bank of Baroda offers a loan against property for NRIs that ranges from ₹2 lakh to ₹10 crore. It charges an interest rate ranging from BRLLR + SP + 1.2% to BRLLR + SP + 6.85% for a tenure of up to 120 months.

Federal Bank

Federal Bank provides a loan against property to NRI customers of up to ₹5 crore. The interest rate starts from 10.1% per annum onwards. The loan tenure can go up to 15 years.

IndusInd Bank

The IndusInd Bank offers a loan against property to NRI individuals based on their profile and eligibility rating by the bank. The loan repayment tenure can be up to 15 years.

Note: The interest rates and other charges for NRI loans against property can undergo periodic changes without prior notification.

Conclusion

NRI individuals are eligible for a loan against property provided they have a stable income and valid, necessary documents. Further, both residential and commercial properties are accepted by the lenders, followed by a good credit profile of the NRI consumer.

Frequently Asked Questions (FAQs)

How to apply for a LAP (Loan Against Property) for NRI?

To apply for a loan against property, NRI individuals can directly visit the respective bank’s NRI loan against property page and fill out the form following the instructions on the web page. For example, you can apply for an Axis bank NRI loan against property through Axis bank’s official website.

Which is the best bank for NRIs to get a loan against property? 

Lenders have their own policies , rate of interest, loan tenure, and repayment options. Therefore, comparing the loan features with different lenders is wise to get the best deal.

Which type of property is eligible as collateral for a loan against property for NRI?

An NRI individual can pledge any Indian residential or commercial property as collateral for a loan against property. However, the property should be in their name or the name of their spouse, parents, children, or siblings.

How much amount can an NRI get against a property?

The maximum loan amount on the property depends upon the market value of the property. Usually, most lenders offer 60-70% of the market value as a loan for residential and commercial property.

Where can an NRI individual use the loan funds?

you can use the funds for home repairs and renovations, business expansions, children’s education or marriage, medical emergencies, etc. However, you cannot use the loan amount for speculative trading, investments in stocks and mutual funds, money lending business, investing in illegal plots or property, etc.