Navigating Financial Waters: The Whys and Hows of NRI Personal Loans in India

Reasons People Frequently Take Out Personal Loans

Anywhere in India, in your country of home or employment, or when you are traveling, you may find yourself in a sudden financial bind. The causes, some of which may be quite reasonable, include:

• An urgent medical matter.
• Misplaced or stolen baggage.
• The cost of educating children.
• A profitable business possibility.
• An incident that causes property damage.
• A vacation or wedding in an ideal location.
• A careless purchase made to spoil yourself or loved ones.

People believe that one of the finest methods to address such pressing financial problems is through a personal loan. It may be quite challenging for an expat to get a loan or advance in a foreign nation. The majority of banks that serve NRI customers also provide personal loans. Because of their greater salaries, several Non-Banking Finance Companies (or NBFCs) now provide personal loans to NRIs.

Benefits & Features of NRI Personal Loans

Personal loans are “no-strings-attached” forms of finance that you can use for anything and anywhere, including paying bills, paying off debt, covering medical costs, and remodeling your house.

1) High Loan Amount

Personal loans between Rs 2 lakhs and Rs 20 lakhs are available to NRI borrowers. Depending on your relationship, some lenders may increase it to Rs. 25 lakhs.

2) Flexible EMIs

You can customize the repayment schedule from 6 to 60 months as per your convenience.

3) Attractive Rate of Interest

In comparison to cash advances from credit cards, the interest rates on NRI personal loans are more attractive. The proposed rate is again dependent on the applicant’s profile and relationship.

4) Rapid and Simple Processing

Some innovative banks and NBFCs can process, authorize, and disburse loans within a few hours via their websites or apps! Personal loan documentation requirements have been reduced to the bare minimum.

5) Adaptability in End-Use

Personal loans can be used to meet any financial need by NRIs – no questions asked. Nevertheless, speculation, wagering, and other illicit activities are prohibited.

6) May need a Resident Indian as Co-borrower

A Non-Resident Indian (NRI) and a Resident Indian (RI) can co-borrow NRI personal loans. n the case of a joint personal loan, both (or all) borrowers are not required to have distinct bank accounts or even excellent credit scores. The principal borrower must meet all eligibility requirements.

7) Simple, Complete and Easy Communication

The most frequent source of tension in NRI relationships has been a dearth of or insufficient communication. Numerous services, including EMI alerts, moratorium requests, statements, credit limit updates, and even loan refinancing, can be completed online with a few clicks.

8) Loan in Preferred Currency

The NRI personal loan can be sanctioned and disbursed in either INR or your preferred foreign currency. The majority of lending institutions offer loans in significant currencies, such as USD, GBP, EUR, AED, HKD, SGD, and SAR. The interest-only payments and any lump-sum payments would be made in the currency of the loan. However, some lenders may permit repayment in INR, with or without a fee.

9) No Collateral

Your credit history, represented by a credit score (such as the CIBIL or CRIF score), is based on your loan repayment history. In addition, loan approval requires only a wellpaying employment or a business with substantial cash flows. Some banks or lenders may also sanction your loan if you have a sizable term deposit at the bank. In this case, you can obtain a loan against the deposit without breaking it.

10) NRI Personal Loans: Secured vs. Unsecured

Most personal loans are limited to Rs. 20 lakhs. If you require a loan for a larger amount, you can use your term deposits or other assets as collateral to obtain a loan in excess of this limit. A reputable guarantor will also suffice.

Eligibility for Non-Resident Indian Personal Loans in India

• Applicants must be salaried or self-employed with active NRI status.
• For salaried applicants, a minimum of six to twelve months employment in the current organization.
• Self-employed applicants must provide proof of income for the past two to three years along with evidence that their business or practice is active.
• Some lenders require the primary creditor to be a RI, while an NRI may only apply as a co-applicant.
• The minimum age is 21 and the utmost age is 60 (for salaried employees) or 70 (for self-employed individuals).
• The eligibility criteria listed above are generic and not exact. The criteria may vary from lender to lender and situation to situation.

Consider the Following Checklist Before Applying for an Nri Personal Loan in India

• Use personal loans only for exigent financial needs, not for extravagance.
• The rate of interest on unsecured loans is higher. Therefore, use a home loan for needs such as home extension or improvement.
• Always consider alternative options, such as a cash advance from your employer or assistance from family members.
• Generally, the bank with which you have an established relationship will execute your loan more quickly.
• If you take out a loan in the currency of your home country, you may save on currency conversion fees, but you may incur an additional administrative fee. It may also place you at a disadvantage when attempting to repay an INR loan.
• The majority of lenders require a RI co-applicant who is a close relative.
• Read the fine print, as processing fees, late payment fees, prepayment fees, and currency conversion fees may be applicable.

Documents Required

Before applying, you must have the following documents (and their digital copy) available:

• Passport and valid Visa.
• 6 to 12 months bank statements from an overseas bank.
• India Address Proof – Aadhaar, Voter ID, Passport (for both the applicant and the co-applicant).
• Overseas Address Proof – for NRI Applicants – Residence Permit
• Address Verification by Indian Consulate/Embassy.
• Employment Verification – Appointment Letter, Your official and HR’s
• Email ID, Official Identification, Current Salary Slips, and an Active Work Permit.
• 6 to 12 months of NRO, NRE, or FCNR bank statements are required.
• Power of Attorney in favor of the RI co-applicant that is valid.

How to Apply for Personal Loans for Non-Resident Indians in India?

You can approach the lender through multiple channels to apply for an NRI loan:

• Visit the bank or NBFC branch closest to you if you are in India. Alternatively, you can approach a relative to assist you.
• If the lender has an overseas branch or business partner in your city of domicile, you can visit them.
• If you have an existing relationship with the lender, consult with your relationship manager.
• Visit the lender’s website or app and fill out the NRI personal loan application form with your information.

You can also contact your financial advisor in India, who can not only advise you on the necessity, risks, and benefits of a personal loan, but also serve as your emissary in obtaining one. If you intend to use deposits or other assets as collateral, your advisor may assist you with decision-making.