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Important things to consider before opting for an NRI Home Loan

23 Oct 2025 by Team FinFIRST

NRIs opting for a home loan in India

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Buying a home in India is often driven by emotional ties, retirement plans, or investment opportunities for Non-Resident Indians. While availing an NRI home loan makes property ownership accessible, it comes with unique considerations compared to resident borrowers. From eligibility and documentation to tax benefits and repayment through NRE/NRO accounts, being aware of these factors helps avoid surprises. With proper planning, NRIs can seamlessly secure their dream home in India while maximising financial and tax advantages.

Several banks and non-banking financial companies (NBFCs) offer NRI home loans. However, before applying for a loan, there are several factors that you should consider.

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5 factors to consider before applying for NRI home loans

Here’s what you need to keep in mind before applying for an NRI home loan:

1. Eligibility criteria

Every NRI home loan comes with its set of criteria. While it may vary across lenders, some of the most common ones include the following -

Age bracket	Minimum: 21 years Maximum: 60 years
Occupation	Salaried
Work experience	A minimum work experience of at least 3 years is needed by most lenders
Minimum income	Usually starts at Rs 1 lakh per annum
Type of property	All types of property except agricultural property, farmhouse, or plantation. To buy any of these properties, a special RBI (Reserve Bank of India) approval is needed

2. Local co-applicant

Almost all lenders require NRIs to appoint a local co-applicant for the loan who would jointly take the home loan with the NRI. The co-applicant is also responsible for repaying the loan.

The lender might also ask NRIs to give the co-applicant the Power of Attorney (PoA). The PoA allows the co-applicant to deal with the lender, sign the necessary documents, and get the loan processed easily.

3. Exchange rate fluctuations

The NRI home loan is issued in Indian Rupee (INR). It is also repayable in INR. As an NRI, you will have to open a Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account with an Indian bank. Once opened, you can transfer your foreign income into the NRE account or the NRO account and use it to repay the loan. However, be aware of the exchange rate fluctuations since they would affect the repayment.

An NRI home loan is more than financing—it aligns global earnings with your Indian dreams, making homeownership a reality.

4. Tax implications

NRIs can claim deduction under Section 80C and Section 24(b) on their NRI home loan repayment. Section 80C will allow you to claim a deduction on the principal paid (up to Rs 1.5 lakhs), while Section 24(b) will exempt the interest expense (up to Rs 2 lakhs).

Note: The above benefits are not applicable under the new tax regime.

5. Additional documentation requirements

NRIs have to submit additional documents for loan processing, such as -

Income proof
Employment contract
Visa or passport
Work permit

While it is important to consider the above factors when applying for an NRI home loan, you must also find a reliable banking partner. IDFC FIRST Bank, with its customer’s first approach, brings a flexible and affordable home loan for NRIs. You can enjoy one of the most competitive interest rates, repayment tenure of up to 240 months, and loan amounts of up to Rs 3 crores to purchase your dream home.

Conclusion

Applying for an NRI home loan requires a clear understanding of eligibility, repayment mechanisms, tax rules, and documentation. NRIs should compare lenders to secure the most competitive interest rates and flexible repayment terms. By planning wisely and choosing the right financial partner, NRIs can fulfil their dream of owning property in India with ease and confidence.

IDFC FIRST Bank offers NRI home loans with competitive interest rates. You can get loans up to Rs 3 crores with repayment tenures of up to 240 months. Simplify your home buying process with an IDFC FIRST Bank home loan and invest in your dream property.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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