NRI Income Tax & Compliance

All You Need to Know About NRI Home Loans in India

autohr img By Pankaj Shaw | Last Updated : 04 Nov, 2025

NRI Home Loans in India
Table of Contents

NRIs can apply for a loan in India to own a residential property. An NRI home loan is a financial tool specifically designed for NRIs who want to purchase, construct, or renovate a residential property in India. These loans are similar to regular home loans but have specific eligibility criteria. It is regulated by the RBI (Reserve Bank of India) to ensure compliance with foreign exchange laws.

Similar to Indian residents, an NRI home loan can cover 70% - 90% of the property's value. The NRI must use their personal funds to pay the remaining balance in INR. In this blog, we will guide you through everything you need to know about an NRI home loan. We will discuss the benefits, eligibility criteria, required documents, interest rates, and much more. 

Key Takeaways
  • An NRI home loan is a financial tool that is granted to Indian citizens residing abroad. 
  • You can use the NRI home loan amount to purchase, construct, or renovate a new/existing residential property in India. 
  • The loan can be repaid through EMI payments from an NRE or NRO account, or through international remittances. 
  • An NRI can avail tax benefits on NRI home loans by claiming deductions under Section 80C, 80EE, and 24 (b). 
  • The interest rate and tenure of an NRI home loan in India may vary depending on the lender and the applicant's profile. 

What is an NRI Home Loan?

An NRI home loan is a special type of home loan granted to Indian citizens residing abroad. These loans function just like a regular housing loan. If your loan is approved, you will receive a specified amount that you can use to purchase, construct, or renovate a residential property in India.

You can also use it to purchase a plot or fund home improvement projects. However, as per FEMA (Foreign Exchange Management Act) guidelines, an NRI cannot purchase agricultural land, farmhouses, or plantation properties in India with an NRI home loan. 

An interest charge will be applied to the amount in accordance with the prevailing rate. You must mandatorily repay the loan amount within the specified tenure. The banks and financial institutions usually allow you to repay the amount through EMI (Equated Monthly Installments) payments. The loan repayment must be made strictly through an NRE (Non-Resident External) account, an NRO (Non-Resident Ordinary) account, or international remittances. 

What are the Benefits of Taking an NRI Home Loan?

Here are the benefits that an NRI can avail of after taking an NRI home loan:

  • Numerous lenders offer a part loan repayment option for NRIs at no extra cost. 
  • Some financial institutions may often provide higher loan amounts to NRIs. 
  • NRI home loans are structured similarly to regular home loans with the same terms and eligibility criteria.
  • The loan amount can be utilized to build, purchase, or renovate a new/existing residential property.
  • You may also sometimes receive shorter repayment terms than for regular home loans. 

What is the Eligibility for NRI Home Loans in India?

Before applying for an NRI home loan, make sure you meet the eligibility requirements. Several factors like age, employment type, credit score, work experience, etc. might impact your loan approval. Consider the table below to determine your eligibility:

Criteria  Eligibility Requirments 
Age  23-65 years
Educational Qualification  A diploma or degree is required. Also, must have a minimum of three years of overseas experience or one year of professional degree experience. 
Employment Salaried or Self-Employment 
Work Expereince  Minimum 2 years of employment in the current company 
Minimum Salary  Differs based on the lender 
Residential Status  NRI (Non-Resident Indian), PIO (Person of Indian Origin), or OCI (Overseas Citizen of India
).
Credit Score 750+ (varies by financial institution)
Tenure  Up to 15 years 

What are the Tax Benefits Available on NRI Home Loans?

An NRI can enjoy several tax benefits on a home loan in India. You can claim tax deductions with NRI home loans in India under various sections of the IT Act, 1961. These include:

  • Section 80C - Deduction of INR 150,000

You can claim an annual income deduction of INR 150,000 on your home loan expenses and repayment under section 80C. This includes a one-time deduction for loan registration charges and stamp duty in the year of acquiring the property. 

From the following year, the deduction applies to the principal repayment of the home loan. Additionally, you can keep claiming the deduction of INR 150,000 every year under section 80C until you repay the loan completely. 

  • Section 80EE: Deduction of INR 50,000

The Government of India provides benefits for first-time homebuyers financing their property through a home loan. Under Section 80EE of the IT Act, you can claim an additional deduction of up to INR 50,000. This one-time deduction applies to Home Loans of up to INR 35 lakhs, with the property value not exceeding INR 50 lakhs. 

  • Section 24(b) - Deduction of INR 200,000

Under section 24(b), you can claim tax deductions of up to INR 200,000 annually on the interest repayment component of your home loan. Similar to Section 80C, this deduction is available every year until the end of the loan tenure, provided the property construction is completed within five years of loan disbursement; otherwise, the limit is reduced to INR 30,000 annually. 

What are the Documents Required for an NRI Home Loan Application? 

Here are the documents you need to apply for an NRI home loan:

Property Related Documents 

  • For new homes: Buyer agreement and payment receipt made to builders.
  • Resale homes: The copy of the agreement to sell, title deeds, and payment receipt made to builders.
  • Home construction: Estimate of the construction of the architect, title deed of the plot, and evidence of no obstructions on the property.

Proof of Identity

  • For salaried applicants: Valid passport or work visa.
  • For self-employed applicants: Aadhar card, passport, voter ID card, or valid visa card.

Proof of Income 

  • For salaried applicants: Salary slip of the latest 3 months, 6 months bank account statement, IT returns, POA details, employment contract, Form 16, NRE/NRO statements. 
  • For self-employed applicants: Your business details, profit and loss account statements for the last 3 years, IT returns, current and savings account statements for the last six years, and balance sheet.

Other Documents 

  • Employment details and proof of own contribution. 
  • Provide details of any ongoing loans, if there is any. 
  • Passport-sized photographs with your and your co-applicant's signature. 
  • Proof of own contribution, latest 26 AS, list of shareholders and directors of your company, and partnership deed.

What are the Interest Rates and Loan Tenures for NRI Home Loans?

NRI home loan rates are generally the same as those of normal home loan rates. Consider the table below to understand the interest rates as per banks:

Bank Interest Rates p.a. (per annum)
SBI 6.90% - 7.50% p.a. 
Axis Bank 6.90% - 8.55% p.a.
HDFC Ltd.  6.90% - 8.00% p.a. 
Canara Bank 6.90% - 8.90% p.a. 
Bank of Baroda  6.85% - 7.20% p.a. 

NRI Home Loan Tenure 

Generally, lenders issue a loan amount for a specified time window, which is called tenure. The tenure is the time period within which you need to repay the entire loan amount. Usually, an NRI's home loan tenure is between 15 to 30 years; however, it may differ from lender to lender. Furthermore, it may also differ depending on the strength of your application. 

The Bottom Line 

An NRI can easily apply for a home loan in India from anywhere in the world, provided they meet the eligibility requirements. Numerous lenders offer competitive interest rates for NRI home loans, so you must review and choose as on your needs. Additionally, the application process is simple and quick. 

Now that you know more about how to apply for an NRI housing loan with this comprehensive guide, you can avail the funds required to set up a home base in India. To know more about how your loan will be taxed, eligible deductions, and many other doubts, it's advised to seek guidance from a reputable professional at Savetaxs. 

We have an entire team of experts with years of experience and knowledge in this field. They will help you understand your tax liability on the loan amount. Also, they will assist you in determining the deductions you are eligible to claim and guide you regarding fund repatriation. So, contact us right away, and expereince utmost convenience and precision. We are working around the clock across all time zones to provide you with the highest quality service. 

Note: This guide is for information purposes only. The views expressed in this guide are personal and do not constitute the views of Savetaxs. Savetaxs or the author will not be responsible for any direct or indirect loss incurred by the reader for taking any decision based on the information or the contents. It is advisable to consult either a CA, CS, CPA or a professional tax expert from the Savetaxs team, as they are familiar with the current regulations and help you make accurate decisions and maintain accuracy throughout the whole process.
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Pankaj Shaw (Tax Expert)

Mr Shaw brings 8 years of experience in auditing and taxation. He has a deep understanding of disciplinary regulations and delivers comprehensive auditing services to businesses and individuals. From financial auditing to tax planning, risk assessment, and financial reporting. Mr Shaw's expertise is impeccable.

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Frequently Asked Questions

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Any individual who has taken a home loan for purchasing, constructing, or renovating a residential property can claim tax deductions. The borrower must be the owner or co-owner of the property and repay the loan using their own income. NRIs can also claim similar tax benefits under Sections 24(b), 80C, and 80EE of the Income Tax Act.

The total tax savings depend on your loan amount, interest rate, repayment structure, and your tax slab:

  • Under Section 24(b): You can claim up to Rs. 2 lakh on the interest paid.
  • Under Section 80C: You can claim up to Rs. 1.5 lakh on the principal repayment. 

It means you can save up to Rs. 3.5 lakh in a financial year. If you fall under the 30% tax slab, the maximum saving can be around Rs. 1.05 lakh per annum.

Yes, you can claim both HRA (House Rent Allowance) and home loan tax benefits at the same time, but only if you live in a rented house while repaying a home loan for another property.

Yes, you can claim tax benefits on a second home loan also. The interest paid on the second home can be fully deducted under Section 24 (b) with no upper limit. However, the total loss incurred from house property that can be set off against other income is capped at Rs. 2 lakh annually. Additionally, there is no deduction under section 80C for principal repayment on the second home.

You can enjoy several tax benefits on your home loan under these sections:

  • Section 80C: Deduction up to Rs. 1.5 lakh on principal repayment.
  • Section 24 (b): Deduction up to Rs. 2 lakh on interest paid.
  • Section 80EE/80EEA: Additional deduction of Rs. 50,000 or Rs. 1.5 lakh for first-time homebuyers (based on eligibility). 
  • Stamp Duty and Registration: Deduction under Section 80C (within Rs. 1.5 lakh limit). 

In case you are a first-time buyer, you can claim a combined deduction of up to Rs. 5 lakh. However, these limits depend on eligibility and the prevailing rules of the financial year: 

  • Rs. 1.5 lakh under Section 80C (principal)
  • Rs. 2 lakh under Section 24 (b) (interest)
  • Rs. 1.5 lakh under Section 80EEA (additional for affordable housing).