Non-Resident Indians (NRIs) usually need loans for investing in property, business, or personal expenses in India. Indian banks and financial institutions provide NRI Loans to address their unique needs, which are designed differently than conventional loans as per the requirements of the Foreign Exchange Management Act (FEMA). For purchasing a house, establishing a business, or meeting education expenses, NRIs can access different types of loans from Indian banks.
Types of NRI Loans Available in India
NRIs can opt for various types of loans according to their financial requirements. The most popular loan segments are:
1. NRI Home Loan
- For NRIs who want to purchase, build, or repair homes in India.
- Repayment has to be done via Non-Resident External (NRE) or Non-Resident Ordinary (NRO) accounts.
- Tenure varies from 5 to 30 years, depending upon the age and stability of income of the applicant.
2. NRI Personal Loan
- A general-purpose loan that can be utilized for medical bills, weddings, foreign travel, or any other personal expense.
- Unsecured loan, i.e., no collateral is needed.
- Interest rates are higher than house loans because of the non-secured nature of the loan.
3. NRI Car Loan
- Loan to purchase a car in India.
- Co-applicants can be allowed by some banks, like resident Indian family members, for convenience.
- Repayment of the loan is made out of NRE/NRO accounts.
4. NRI Business Loan
- Can be used by NRIs to start or run a business in India.
- Collateral, e.g., property or fixed deposits, may be required.
- The business should be registered in India and fulfill FEMA requirements.
