Personal Loan for NRIs in India – Documentation & Procedures

Every year many people emigrate from India to other countries in search of better job opportunities, education, a better lifestyle, etc. Even though they have moved abroad, NRIs are still Indian citizens and most of them still have family and business commitments back home. If an NRI is residing temporarily abroad, he/she may require financial assistance in that country. In such a situation, applying for and obtaining a personal loan there could be challenging. Apart from that, an NRI may need funds for meeting financial emergencies in India like medical needs of a family member, a wedding, or home renovations. Banks and other lenders understand this need and they offer personal loans for NRIs, commonly known as NRI loans. Although the purpose of applying for a personal loan remains the same for resident Indians and NRIs, the process and documentation vary.

What is an NRI Personal Loan?

An NRI personal loan is a personal loan that can be applied for by Indians residing abroad to meet family and other commitments in India as well as in their country of residence. While resident Indians can apply for a personal loan without any security, NRI personal loans could be both with and without security. In contrast to other loans, this is a short-term loan with a maximum repayment term of five years for most lenders. Following disbursement of the loan, the borrower may opt for equated monthly installments, or he may prepay the loan as a lump sum amount. Many lenders offer instant loans for NRIs that can be applied online.

Types of NRI Personal Loans

Personal loans for NRIs can broadly be classified into secured and unsecured loans. Most banks do not insist on collateral for loans to NRIs, however, some lenders do insist on collateral.

Secured NRI Personal Loan: When an NRI applies for a personal loan in India, some lenders insist on some collateral to be pledged, usually when the loan amount is high or the applicant’s credit score is sub-optimum. The collateral could be NRE/NRO term deposits, FCNR deposits, assets, shares, or any asset owned by the borrower. The lender may also ask for a resident Indian co-applicant or a guarantor to mitigate the associated risk of the lender.

Unsecured NRI Personal Loan: These NRI loans are similar to conventional personal loans in which no collateral is required to be pledged. The interest rates for such personal loans are usually high as there is a risk involved in an unsecured personal loan for NRIs.

Features of an NRI Personal Loan

NRI Loans are designed specifically for NRIs and hence the features also differ from the regular personal loans for resident Indians.

FeatureDetails

Interest RateThe personal loan interest rate for NRIs is determined by the applicant’s credit history, loan tenure and loan amount. It could vary for different lenders. Do check for the interest rates offered by different lenders.

Currency PreferenceThe NRI Personal Loan will be sanctioned and credited in either Indian currency or a different currency, as per their preference.

Repayment TenureFlexible repayment tenures are available for NRIs. It can range from one year to five years or sometimes even longer, depending on the lender.

Application and ProcessingNRIs can instantly apply for a personal loan. They can apply for a loan both online and offline. Disbursals for NRI Instant loans can take 2- 48 hours.

Eligibility Criteria for NRI Personal Loans

The personal loan eligibility for NRIs and resident Indians differs. It could also differ for different lenders.

For Salaried

Age: Minimum 21 years and maximum 60 years.
Minimum Total Work Experience: 2 years with at least 1 year in the current organization.
Co-applicant is mandatory and must be a close relative of the applicant, such as a father, sibling, spouse, etc.
Lenders evaluate the personal loan eligibility for NRI applicants based on the credit score, monthly income, employer’s profile, job profile, ongoing EMIs, etc.

For Self-Employed

Age: Minimum 21 years and maximum 68 years.
Minimum Total Work Experience: 2 years in the current business.
Co-applicant is mandatory and must be a close relative of the applicant, such as a father, spouse, etc.

Documents Required For NRI Personal Loans

NRI applicants are generally required to submit the following basic documents to apply for an NRI personal loan:

Duly filled application form with passport-sized photographs.
Photocopy of the applicant’s Passport and Visa.
Identity Proof: (For both applicant & co-applicant): Aadhar Card, PAN Card, etc.
Address Proof: (For both applicant & co-applicant): Passport, Aadhar Card, etc.
Income Proof: Both Indian and international bank account statements for the last 6 months, Salary certificate (in English) or salary slips for the last 6 months.
Employment Proof: Appointment Letter, Job contract, HR’s email ID or official email ID, Labour/ Identity card/CDC (for NRIs working in the Middle East or employed in Merchant Navy).
Applicants may be required to submit additional documents depending on the personal loan documentation policies set by the respective lenders.