Non-resident Indians are people who have moved to another country for employment or other opportunities or those who spend less than 182 days in India. Over the past few years, an increasing number of NRIs have increased investments in the real estate sector. Most NRIs prefer to take the home loan route when it comes to residential property investments in India. Other than offering home loan tax benefits in certain specific scenarios, NRI home loans also ensure the required due diligence and that one is not investing in a property mired in any kind of legal trouble. In other words, home loans help ensure the safety of one’s investment, albeit only to a certain extent. However, many home loan NRI myths keep many other NRIs from investing in the Indian residential space and benefitting from its abundant growth, even when they want to. In this article, we debunk some of the most popular home loan NRI myths. So, read on. 

Debunking Home Loan NRI Myths: Here’s What You Must Know 

1. NRIs Cannot Invest in the Indian Residential Market 

One of the biggest myths associated with NRIs is that they cannot invest in the Indian residential space. The key contributor to this myth is the fact that until a few years ago, most banks and NBFCs sanctioned home loans only to Indian citizens. However, this has changed over the last few years and today, most banks and NBFCs offer home loans to NRIs as well. Therefore, if you are an NRI and someone tells you that you cannot buy a property in India, tell them they are mistaken. 

2. NRIs Cannot Avail of Long-Tenor Loans 

Home loans usually involve a hefty sum and therefore, to ensure ease of payment, lenders generally sanction these loans for a long repayment tenor. Most lenders allow borrowers to repay home loans over 20 to 30 years. Some lenders extend the home loan tenor to up to 40 years to further make loan repayment entirely stress-free. Many NRIs believe that they must repay their loans over a short period. While lenders do not give NRI loan borrowers as long as 30 to 40 years to repay their loans, NRIs are also not expected to repay their loans over a short span, say 10 years. So, the myth that NRIs cannot avail of long-term loans is incorrect.

3. NRI Home Loans Attract Higher Home Loan Interest Rates 

This myth is actually entrenched in some truth. Until a few years ago, lenders used to charge higher home loan interest rate on NRI home loans, primarily to cover up for the extra risk that used to be associated with these loans. However, over the last few years, many lenders have started offering home loans to NRIs at pretty much the same rate of interest at which Indians are sanctioned home loans. Yet another myth associated with home loans for NRIs is that NRIs cannot avail of joint home loans. The truth is you can easily add any relative or family member who lives in India as a co-borrower. However, you must be able to provide all the required documents to complete the home loan process properly. 

Conclusion

Non-resident Indians are increasingly investing in the Indian real estate sector. Home loans not only make buying a home easier but also facilitate proper due diligence, protecting the buyer against legal issues. Unfortunately, some myths surrounding home loans deter NRIs from investing in the Indian real estate market. We hope this article has been able to bust some of these myths.