Difference Between NRI Home Loan and Indian Resident Home Loan

Difference Between NRI Home Loan and Indian Resident Home Loan


Home loans for non-resident Indians are quite distinct from the regular loans offered to the resident Indians. Read on to know more about the difference between NRI home loan and loan for others.

Applying for a home loan is one of the best ways to get funds for purchasing your dream home; it makes home ownership easy. No matter if you are a local resident or an NRI (Non-resident Indian), you can easily get a home loan from any lender of your choice provided you meet their specific requirements. However, many first-time home loan applicants ask this question – β€˜is NRI home loan different from home loan for resident Indians?’

The answer is YES, the NRI home loans are quite different from loans meant for resident Indian. Let us discuss how they are different.


While applying for a home loan, one of the most important things you must note is whether you classify as an NRI or not. All the leading financial institutions abide by the Reserve Bank of India definition of NRI, which states – if you live outside India for 182 days or less in a year and hold an Indian passport, you are classified as an NRI.

So, if you qualify as an NRI, you must mandatorily apply for a home loan for NRI and comply with the specific borrowing rules. However, if you are a local resident, you can apply for a regular home loan.

Loan tenure

The loan tenure is one of the critical things to consider while you apply for a home loan as it has a direct impact on the EMI amount and affordability. Typically, the longer the tenure, the lesser is the EMI and vice-versa.

If you are a resident Indian, you have the flexibility to choose the loan term ranging from 15 to 30 years as per your repayment capacity. Whereas, the home loan for NRI is available only for a maximum period of 20 years.

Interest rate

Although the lenders in India offer home loans for both resident Indians and NRIs at a competitive interest rate, the interest rate for NRI home loans are generally a little higher than the loans for resident Indians.

Typically, the interest rate varies based on the amount you apply. As an NRI, you can get home starting from 6.95%. Whereas, if you are a resident Indian, you can get a loan starting from 6.70%. No matter if you are an NRI or a resident Indian, while availing a home loan, you must compare the interest rate from different lenders and choose the one with the lowest rate so that the EMI is affordable.


While you apply for a home loan, you must comply with certain documentation processes. However, most lenders in India have extensive documentation for NRI home loans. The applicant must submit several documents relating to NRI status, income, profession, property, etc. Also, you may need to get the documents attested from the local embassy in the country of your residence to authenticate the same.

The documentation for resident Indians is much simpler. You need to submit income documents, proof of identity, proof of residence, income proof and property papers.

Loan repayment

If you are an NRI, all the home loan-related payment must be done as per the RBI framework; the down payment and the EMIs should be paid through the NRO (Non-resident ordinary) or NRE (Non-resident external) bank account only.

If you are a resident Indian, you can do the home loan-related payments through your savings bank account, or cheque. Today, most lenders also accept payments through UPI.

Final Word

Now that you are aware of the difference between NRI home loan and resident home loan, make sure that you apply for the right type of loan.