Learn all about an FCNR account with RBL Bank: how to open an account, interest rates, currencies supported, and how to transfer funds.
Personal loans for NRIs can be used for large purchases, home renovations, education, or a dream wedding. Let’s take a closer look at the loans that NRIs have to choose from and the banks that carry them.
In no particular order, here is a list of the top banks in India for NRIs to get a loan:
- ICICI Bank
- State Bank of India (SBI)
- HDFC Bank
- Punjab National Bank (PNB)
- Axis Bank
- South India bank
- Kotak Mahindra
- Tata Capital
To help you decide which one might be the best for you, here is a handy table:
|Provider||Eligibility||Interest Rate (p.a.)||Fees||Loan amount||Loan tenure|
|ICICI Bank||Must apply with a Resident Indian as co-applicant||Starting from 15.49%||Mention different types of fees and their amounts.||₹10 lakh||3 years|
|State Bank of India||Must have a NRE, NRO or FCNR (B) deposit||1.00% over the interest rate paid on the deposit used as collateral||1% of loan amount, with a cap off ₹50,000||No limit, based on deposit||Up to the remaining time till maturity|
|HDFC Bank||Must have a NRE, NRO or FCNR (B) deposit||Starting at 10.25%||Up to 2.50% of the loan amount with a cap at ₹25,000 if you salaried income||70-90% of deposits||Up to the remaining time till maturity|
|Punjab National Bank||Must be for building, repairing or renovating a flat or home||Starting from 7.50%||0.35% + ₹1350 for documentation charges||₹25 - 50 lakh||No more than 30 years|
|Axis Bank||For home or commercial real estate||6.75-12%||Up to 1% of the loan amount with a cap at ₹10,000||₹30 - ₹75+ lakh||1-25 years|
|South Indian Bank||Must apply with a Resident Indian as co-applicant||7.35% - 9.60%||2% of the loan amount||₹1 - ₹10 lakh||1-5 years|
|Kotak Mahindra||Must be a home or home improvement loan||6.55% - 7.15%||0.5-1% of the loan amount||Upto 80% of the cost of the property or improvements||5-15 years|
|Tata Capital||Must be a home loan||From 9.00%||Up to 1.50% of the loan amount||₹2 lakh - ₹10 crores||10 years+|
While there are a lot of personal loans out there, not all are available for NRIs. Let’s take a look at them closer.
In most banks in India, you’ll find that NRIs are able to get home loans for purchasing a new home or for renovations to an existing property. The loan amounts are given based on a percentage of the home or renovations costs.
But only a few like ICICI Bank and South Indian Bank actually offer personal loans for other expenses like education, medical, or travel.
Other banks like SBI or HDFC only offer loans against existing NRE or NRO deposits you have at the bank.
So identify what you need the loan for and from there you can look at what is possible with the banks that you have an existing relationship with. Many banks require at least a certain amount of history of an NRE, NRO, or FCNR (B) account before a loan can be offered.
|🔖 Read more: Home loans for NRIs|
Eligibility can make or break getting a loan. Be sure to read the small print for each loan carefully and make sure you meet all requirements. This can mean having a Resident Indian as a co-applicant or meeting a certain salary requirement.
How long are you comfortable with repaying a loan? The pressure of repayment can feel overwhelming, so make sure you have a repayment schedule and interest rate that works for your financial situation. And of course, keep an eye out for additional fees that can accrue when managing your loan.
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It can sometimes be overlooked, but how easy it is to submit an application and manage a loan can help make the process easier. Some banks like SBI will require that you apply in person, while other more digitally native banks will allow you to complete the forms online. Make sure to keep into account the ease of completing an application.
ICICI provides an easy and simplified method to get an NRI personal loan. But the bank does require that the resident Indian co-applicant is a close relative and the NRI applicant is in India at the time of application. An NRI applicant will also have to show a salary slip and an NRE/NRO bank statement.
State Bank of India offers NRI a loan against deposits for use in India. It can be used for business purposes, purchasing a house or flat, or due to an emergency situation. Only a loan against an FCNR (B) is possible to open from an overseas SBI office and in a foreign currency.
HDFC lets NRIs borrow against their NRE, NRO, and FNCR (B) deposits in times of need or emergency. If you are looking for a loan for a home purchase in India, HDFC has a separate home loan for NRIs.
PNB offers personal housing loans to NRIs for purchasing, renovating, or repairing a flat or home in India. The loan is required to be used for a flat or home that the account holder is occupying or putting on rent, and not for a real estate business.
Axis bank offers NRI loans for home or investment property purchases. Axis bank has an easy-to-use application process and you can be approved in 5 days. There is an income requirement of $3,000 USD per month and a minimum tenure abroad of 2 years to qualify.
South Indian Bank offers their regular resident personal loans to NRIs, but there are differences in eligibility amounts versus residents. NRIs are also required to show 12 months of an NRE account and have a Resident Indian as a co-applicant on the account.
Kotak Mahindra is offering an NRI home loan and an NRI home improvement loan for first-time homebuyers or those looking to update a family home. Both types are suited for NRIs and eligibility is based on income requirements from overseas earnings.
Tata Capital is a go-to for loans in India but only offers loans on homes for NRIs. The benefit of Tata Capital is that NRIs do get attractive rates, a flexible EMI option, and customizable tenure on their loans.
Sources used for this article:
All sources checked as of 30 March, 2022
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