Difference between Home Loan for NRI and Indian Residents - Kotak Bank
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05 MAY, 2021

Purchasing a house is usually one of the biggest financial goals of a common man, irrespective of wherever he lives. Whether you live in India or wish to come back to your own country one day, a house is a must. Understanding the sentimental value that a home holds for people, lenders offer various kinds of loans like a home loan for resident Indians as well as NRI home loans. However, before availing a home loan it is important to know which one is suitable for you.

There are many differences between a home loan for resident Indians and an NRI home loan. Before we get in to details, let us understand who are termed as NRIs.

Who is an NRI?

Generally speaking, Non-Resident Indians are people who hold valid Indian passports and are Indian citizens but do not stay in India. They may have travelled abroad for a work project, studies or some assignment. However, a more systematic definition of an NRI is available under the Income Tax Act. As per the IT Act, any person who stays in India for less than 182 days in one financial year is called Non-Resident Indian. Similarly, as per the Foreign Exchange Management Act, an NRI means “a person resident outside India who is a citizen of India”.

Difference between a Home Loan for Indian Residents and Home Loans for NRIs

There could be some differences in the process or eligibility criteria of home loans for NRIs. For example, several lenders require the NRI applicants to hold at least a graduate degree as a part of eligibility criteria to be able to approve their loan application. Similarly, lenders can also require NRIs to have an Indian resident as a co-applicant or co-borrower of the loan. Moreover, typically the interest rates on home loans are higher than that offered to a resident Indian. It is because the risk of lending money to NRIs is slightly higher.

The major points of difference between a home loan for Indian residents and home loan for Non-resident Indians are explained below.


Resident home loan

NRI home loan


For Indian residents

For Non-Resident Indians

Tenure of the loan

Maximum tenure is 20 years

Usually, the tenure ranges between 5 years and 15 years.

Interest rates

The interest rate for home loans starts from 6.65% depending on your eligibility.

Usually higher than home loans for resident Indians


For home loans, resident Indians need to submit KYC documents like address and identity proof, salary slips, Income tax returns, 6 months bank statement, and passport size photographs.

Over and above the documents required for resident Indians, NRIs can also be asked to submit documents like a copy of passport, statement of NRO or NRE account, contract of employment, work permit, valid visa papers, salary certificates, and a general power of attorney. However, this could vary from lender to lender.

Manner of repayment

An Indian resident can repay the home loan through a regular savings bank account.

NRIs can repay the loan only through NRO and NRE accounts with remittances from abroad. The repayment should be in Indian rupees. 


If you are an NRI and have been planning to avail a home loan in India, you can contact Kotak Mahindra Bank and talk to our home loan advisors for all your queries, who are available for your help 24*7. Once you fulfil the eligibility criteria, furnish the documents and complete the requisite formalities, you can easily avail an NRI home loan in India.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.