There may be several reasons like work, better opportunities, and family commitments that lead many people to move out of their country. If you have newly moved to another country or are put up there for a short duration and need urgent financial help, it will be a tedious process to get a loan from the banks there. This is when NRI loans may help you out.
What is an NRI Personal Loan?
An NRI personal loan can be available from various banks in India to fulfill your personal needs like travel, medical emergencies, and renovation in another country.
In times of financial urgency, Personal Loans offer you the much-required financial flexibility. There is no need to use your savings to meet the requirements. You can avail a personal loan from any financial institution of your choice within a few working days. However, the repayments have to be made in easy EMIs over an extended repayment tenure.
All these features make Personal Loans an ideal credit tool for NRIs at the time of financial crisis. These are all-purpose loans that can be used for several purposes. You do not need the lender’s approval to use the credit.
Features of NRI Personal Loans
Some common features of NRI personal loans are:
- The NRI personal loan needs a co-applicant. However, the co-applicant must be an Indian resident. The amount may vary from 10 lakh to 30 lakh.
- The Indian resident co-applicant can be an earning or non-earning member.
- Some lenders (who do not require co-application) may ask for an asset to be pledged as collateral.
- NRI personal loan interest rates are usually higher than non-NRI personal loan interest rates.
- Like regular personal loans, the application process for NRI personal loans is quick and easy.
- These are multipurpose loans, that is, As an NRI, you can use it for a variety of purposes,
- The personal loan is also credited to your account in the currency you prefer.
Types of NRI Personal Loans
There are the following two types of NRI personal loans in India.
1. Secured Personal Loan
A secured NRI personal loan needs you to pledge an asset as collateral security. This loan can be obtained by any family member, co-applicant, or guarantor. The lender may ask for collateral if the loan amount is way too high or the credit profile of the borrower is doubtful.
2. Unsecured Personal Loans
As compared to a secured personal loan, an unsecured NRI personal loan requires zero collateral. However, the interest rates for these unsecured loans are higher than secured ones. This is because it is a riskier situation for lenders. The banks also check and verify the borrower’s repayment capability before offering an unsecured loan.
Eligibility & Documents Required for NRI Personal Loan
Here are the eligibility criteria followed by most Indian financial institutions for determining the eligibility for a Personal Loan for NRIs.
1. Salaried Professionals
An NRI Personal Loan can be obtained easily if you are a salaried professional in the country where you work. You must be working at your current job for at least one year. Remember, you should have documents to prove the same.
2. Self-Employed Professionals
If you have a business abroad, then the business should have been in continuity for at least 3 years. If there is any other property that you own in India, then the prospects for approval of your application significantly increase.
3. Income Criteria
The income criterion is important as a lender would prefer a borrower who has been earning a steady income for the past few years. The lender expects the trend to continue in the future as well. The minimum income required for approval of the loan depends on the amount you have applied for. Another criteria is the country you are working in.
4. Co-Applicant
If you are applying for a Personal Loan for NRIs, then the lenders will ask for a local co-applicant. It may be a close relative. The signature of the co-applicant will be required while signing the loan agreement. You also need to submit the identity and address-related documents for verification.
Documents Required for NRI Personal Loans
NRI applicants are usually required to submit some basic documents to get a personal loan as mentioned below:
- Duly filled and signed application form along with recent passport-sized photographs
- Copy of the applicant’s passport and visa.
- Proof of employment such as appointment letter, HR’s email ID or official email ID, job contract, labour/ identity card/ CDC (for NRIs who are working in the Middle East or employed in Merchant Navy).
- Proof of identity (for both applicant and co-applicant) such as Aadhar card, PAN card, passport, or any other valid document.
- Proof of address (for both applicant and co-applicant) such as passport, Aadhar card, or any other valid document.
- Proof of income including bank account statements of Indian and international accounts for the last 6 months, salary certificate/salary slips for the last 6 months.
- Lenders may ask for any other additional documents depending on their internal personal loan documentation policies.
How to apply Personal Loan for NRIs
If you are an NRI and applying for a Personal Loan, there are a few things that you need to know:
1. High-Interest Rate
Since Personal Loans are unsecured loans, the interest rate will be higher than secured loans. However, the rate of interest is at par with regular Personal Loans.
2. Currency Preference
The Personal Loan will be sanctioned and credited in either Indian currency or a different currency, depending on the country you live in. The preference will usually be asked when you are signing the loan documents.
3. Co-Applicant
If you do not have relatives in India, then the chances for approval for a Personal Loan for NRIs are low.
4. Easy Communication
Queries regarding loan credit or monthly payments can be made over the phone or email. Also, any doubt can be clarified with the help of a co-applicant staying in India. You need not come to India for any query or process of the said loan.
Final Thoughts
If you are an Indian living in another country and need immediate cash then don’t hesitate to apply for instant personal loans in the country of your origin, India. The process is hassle-free if all your documents are in order. However, you must have the repayment capacity. Both secured and unsecured personal loans are available for NRIs across various banks in the country. With an exceptional professional and an excellent credit score, you can secure personal loans with attractive interest rates.
Yes, a personal loan can be given to an NRI. While resident Indians can apply for a personal loan without any security, NRI personal loans could be both with and without security.
The tenure of NRI Personal loan is five years for most lenders.
A person can get a maximum 90% funding if the loan amount is Rs.30 lakhs, 80% up to Rs.75 lakhs, and 75% for loan amounts above Rs.75 lakhs.
No, lenders do not have any restrictions on how the personal loan amount is spent. Borrowers are not required to provide any receipt to the bank to validate their expenses.
