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Personal Loan for NRIs

People move out of the country for various reasons like education, job, etc. Unforeseen financial expenses arise even during times when you are living abroad. If you are living in another country only on a temporary basis, it could be extremely difficult to obtain loans in that country for your urgent financial needs. In this scenario, you can take care of your emergency personal expenses with the help of personal loans available for non-resident Indians (NRIs).

There are many top banks in the country that offer personal loans for NRIs. The personal loan obtained from these lenders can be used for anything ranging from home renovation to vacations. The process for getting these loans have been simplified for NRIs. The same can also be said about repayment methods. Let’s take a look at the different types of personal loans available for NRIs.

Comparison of Personal Loans for NRIs

Some of the top lenders that provide personal loans to NRIs are listed as follows:

Lender Interest Rate Maximum loan amount Maximum loan tenure
ICICI Bank From 15.49% p.a. onwards Rs.10 lakh 36 months
South Indian Bank From 11.70% p.a. onwards Rs.25 lakh 60 months
Home Improvement Loan by Kotak Mahindra Bank Varies based on the loan amount Up to 80% of the home renovation expenses 10 years

ICICI Bank

ICICI Bank is one of the top players in the private banking sector in India. The bank has a diverse range of loan products suitable for NRIs. It is also one of the very few banks in India that offers personal loans to NRI customers. You can use this loan for any of the emergency financial needs including home renovation, wedding, medical emergencies, etc.

Benefits and key highlights:
  • The applicant must be a resident Indian, while the co-applicant can be an NRI. Here, the co-applicant must be a close relative of the applicant.
  • This loan is offered without any collateral or security.
  • The documentation process is very simple, and the loan is disbursed instantly.
  • Document proofs must be submitted by both the applicant and the co-applicant.
Bank Name Processing Fee EMI (for Rs.1 lakh) Pre-Closure Charges
ICICI Bank Up to 2.25% of the loan amount Rs.3,491 (for loan tenure of 36 months) 5% of the outstanding principal amount

South Indian Bank

South Indian Bank is a renowned bank in the private sector that offers various loan products to its customers. NRIs can avail the personal loan offered by the bank to take care of their emergency financial needs. The bank offers personal loans to NRIs at an affordable interest rate.

Benefits and key highlights:
  • This loan can be availed by NRI customers without any collateral or security.
  • One co-applicant is required for NRI customers to avail this loan from South Indian Bank.
  • Self-employed customers do not have to show business stability if they live in their own home or parental home.
  • Women borrowers can avail a concession of 0.1% on the interest rates.
Bank Name Processing Fee EMI (for Rs.1 lakh) Prepayment charges
South Indian Bank Up to 2% of the loan amount Rs.3,305 (for loan tenure of 36 months) 4% of the outstanding principal (if paid within 12 months) 2% of the outstanding principal (if paid after 12 months)

Home Improvement Loan by Kotak Mahindra Bank

This is a personal loan taken for the specific purpose of home improvement. Kotak Mahindra Bank offers this loan to NRIs who have residential properties in India. This loan can be used for any kind of home renovation requirements including painting, decoration, waterproofing, construction, electrical work, etc.

Benefits and key highlights:
  • This loan provides funding for up to 80% of the home renovation expenses.
  • This loan is offered based on the repayment capability of the applicant or co-applicant.
  • If the property is owned by many individuals, the co-owner must be included as a co-application for this loan.
Bank Name Processing Fee EMI (for Rs.1 lakh) Prepayment charges
Kotak Mahindra Bank Contact the bank for details N/A N/A

Eligibility for NRI personal loans

  • These loans are typically provided to salaried or self-employed professionals living abroad. In case of salaried professionals, the applicant must be employed in the same company for at least one year. You must provide proof of income to the bank while applying for loans.
  • Self-employed professionals must provide continuity of business proof. Banks require at least 3 years of business vintage before providing loans for self-employed NRIs. Some banks waive this requirement if the applicant has real-estate properties in India.
  • Most banks have also outlined specific income criteria for applicants to get a personal loan. This requirement is likely to differ for NRI applicants based on the country in which they are employed.
  • Banks also require a local co-applicant before they can provide a loan. This co-applicant must be a close relative of the applicant. This co-applicant can either be an earning individual or a non-earning individual.

Documents required for NRI personal loans

  • Passport and Visa copy
  • Bank statement for at least 12 months
  • Proof of identity
  • Proof of address
  • Salary slips or salary certificate

Identity and address proof documents must be submitted for the applicant as well as the co-applicant.

Things to consider before applying for NRI personal loans

  • Personal loans are intended for emergency financial needs. They are also unsecured loans provided with no collateral. Hence, the interest rates of these loans tend to be higher than other loans like home loans. You need to explore other avenues of obtaining finances before considering personal loans.
  • If you are living in a foreign country, you may enquire with the bank directly about the loan through phone or email. You may also send in your relatives residing in India to a branch office to enquire about a loan.
  • The bank may provide the loan either in Indian rupees or in foreign currency (US dollars) based on their policy. You may choose your preference at the time of taking the loan. You can check with the bank regarding their official policy on how the loan amount will be disbursed.
  • Lenders who provide loans for NRIs typically require a relative living in India to sign as a co-applicant. If you have no relatives in India, you may find it difficult to get a loan. You can check with the bank to understand their policy on co-applicant for a personal loan.

How to Apply?

The application process for personal loans is typically very simple. However, it could be a little challenging for NRIs to apply for personal loans in India from another country. Since most banks have NRI helpdesks, it is possible to contact this service and enquire about the availability of loans. NRIs who are already customers of these banks may get loans easily compared to other customers. It is possible to enquire with the bank through email or phone. Those who have relatives in India can send their relatives to the branch office to get an update on these loans. The customer service department can also be contacted to guide the applicant with the process involved in getting the loan.

FAQs:

  1. Are there any restrictions on how the money is spent?
  2. Lenders do not have any restrictions on how the personal loan amount is spent. Borrowers are not required to provide any bills or receipt to the bank to validate their expenses.

  3. How can NRIs get the personal loan amount?
  4. NRIs can get the personal loan amount from the bank in their NRE or NRO accounts. Most lenders provide the loan amount in Indian rupees. However, some banks also provide these loans in foreign currency. You may check the lender to know about the mode in which the loan amount is disbursed.

  5. Can I take a personal loan even if I am already paying EMIs for another loan?
  6. The conditions vary from one lender to another. This is typically based on the income level of the applicant. While taking a new loan, the applicant must provide information about his/her existing loans. It is necessary for the applicant to have a certain percentage of disposable income after paying all the monthly EMI installments. If this condition is satisfied, the applicant can avail a new loan even with an existing loan.

  7. Can I apply online for personal loans?
  8. Online application facility is available for personal loans. However, NRIs might check with the bank about the process before making the application online. You may contact the customer service centre and ask them to guide you with the process.

  9. Can I ask my friend to sign as the co-applicant?
  10. As per the terms and conditions of most banks, the co-applicant for personal loans must be a close relative. Hence, many banks do not accept friends as co-applicants for personal loans. However, you may check with the bank to know whether this option is available.

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