Top 10 Best Private Banks in India List 2023
November 21, 2023
March 09, 2023
Most people in the country consider relocating abroad for higher education, better economic opportunities, or the desire to start a new life. Adapting to an entirely new living environment in a new country has its own challenges and obtaining financial aid when in an unknown country can give you hard times.
Indian Banks offer tailor-made financing solutions to NRIs. NRIs can obtain personal loans from Indian financial institutions to aid their financial necessities. However, NRI individuals must meet specific eligibility requirements imposed by banks to avail of such a loan.
If you are an NRI residing in a foreign nation, this blog is specially curated for you. We have tried our best to provide you with all the information regarding the personal loans for NRIs, eligibility criteria, the documentation process, and the RBI guidelines imposed on such loans.
|Bank Name||Interest Rates|
|HDFC Bank||10.50% p.a. to 21.00% p.a.|
|State Bank of India||9.80% p.a. to 13.80% p.a.|
|ICICI Bank||10.50% p.a.|
|Axis Bank||10.25% p.a.|
|Kotak Mahindra Bank||10.99% p.a..|
|IndusInd Bank||10.49% p.a.|
|Tata Capital||10.99% p.a.|
|Bajaj Finserv||13.00% p.a.|
|IDFC First||10.49% p.a. to 25% p.a.|
In the financial world, a personal loan is one of the most popular financial instruments. The zero-collateral loan acts as a safety net and helps you manage expenses without draining your savings.
The top Indian banks, such as HDFCBank, State Bank of India, Punjab National Bank, Tata Capital, Citibank, ICICI Bank, etc, offer personal loans to NRIs at attractive interest rates from 10.05% per annum. Further, these loan products come with transparent processing, minimal documentation, and quick disbursements, which make them the perfect tool for NRIs.
Financial institutions in the country provide secured as well as unsecured personal loans to NRIs. In contrast to other loans, this is a short-term loan with a maximum repayment term of five years. Following disbursement of the loan, the borrower may opt for equated monthly installments, or he may prepay the loan as a lump sum amount.
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 do.
Secured personal loans require the borrower to pledge collateral security against the loan. NRE/NRO term deposits, FCNR deposits, assets, shares, or any property owned by the borrower is accepted as collateral. Personal loans can also be obtained from a family member, guarantor, or co-applicant. Banks and lenders usually ask for collateral for a personal loan in case of high loan amounts, or if the applicant’s credit profile is not upto the mark
An unsecured personal loan is a zero-collateral loan where the borrower can obtain funds without pledging any collateral. The banks analyze the NRI repayment capacity before offering him an unsecured loan. The interest rates are usually high as there is a risk involved in an unsecured personal loan for NRIs.
Interest rates are primarily determined by the applicant’s credit history and repayment capacity. The ideal applicant can obtain an NRI personal loan at minimal interest rates. The exact interest rate varies from person to person based on certain external and internal factors. Some of the main factors that affect the NRI personal loan interest rates are the loan tenure and amount.
Financial institutions usually offer zero-collateral personal loans. But in the case of NRIs, if the lending institution is not satisfied with the borrower’s financial standing, they may demand collateral security against the loan. This is because the lender may view it as a credit risk, and will require some sort of guarantee against their investment.
The repayment tenure is the time period offered by the lending institution to the borrower to repay the loan in equated monthly installments along with interest payable. Financial institutions provide flexible repayment tenure for personal loans depending on the borrower’s creditworthiness. Usually, the term for NRI personal loans goes up to 5 years.
Financial institutions allow the borrower to choose the transaction currency during the application process. The loan will be disbursed to the borrower’s NRE/NRO bank account. This way the borrower can avoid the hassle of having to convert the amount into the currency of the country they reside in.
A co-applicant is an individual who participates in the loan approval and underwriting process with the borrower. Their status may be viewed as secondary to that of a principal applicant. Banks usually prefer to have a co-applicant residing in India for NRI personal loans. Further, applying with a co-applicant can also improve your chances for loan approval.
Given below are the set of documents that an applicant will have to submit for a personal loan for NRIs:
An applicant will have to meet the below-given eligibility criteria to obtain a personal loan for NRI in India:
|Particulars||Self-Employed Individuals||Salaried Individuals|
|Age||21 years – 68 years||21 years – 60 years|
|Work Experience||Minimum of 3 years in the current business||Minimum 2 years of work experience
Minimum 1 year of experience in the current organization
The creditworthiness and repayment ability determine the interest rate on NRI personal loans. Interest rates on NRI personal loans start at 10.00% per annum and are highly competitive.
NRIs can apply for personal loans by visiting the bank’s nearest branch or the bank’s official website.
Note: You may consider taking help from your financial advisor. If you plan on pledging collateral, your advisor may help you make the right decision.
According to RBI guidelines, a non-resident Indian can get a personal loan from financial institutions and banks in India. The Ministry of Finance and Reserve Bank of India govern the lending and borrowing policies. Non-resident Indians are offered zero-collateral personal loans and personal loans against overdrafts in accordance with their credit worthiness.
As of 1st January 2016, the Master Direction allows authorized dealers in India to grant INR loans to NRIs against shares and other securities, or against immovable property as collateral. The following guidelines must be followed by NRIs seeking a personal loan:
Given below are some of the things that an NRI applicant should keep in mind before applying for a personal loan:
Yes, an individual can avail of two loans simultaneously. Many lenders approve of taking multiple loans, but if the outstanding debt is high, they might not consider approving the loan.
An NRI is permitted to avail personal loan from a bank in India subject to terms and conditions specified by RBI. Banks offer customised personal loans to NRIs so that they can meet their financial needs.
An NRI individual can avail of a personal loan of up to INR 10 lakhs. However, the lending institution decides the loan amount after evaluating the applicant’s creditworthiness.
An NRI is required to submit a copy of his visa, a copy of his passport, address proof (Indian and abroad), income proof, identity proof, business proof (in case of a self-employed individual), employment proof, and property documents (if applicable).
A co-applicant is an individual who participates in the loan approval procedure with the borrower. Their status may be viewed as secondary to that of a principal applicant. In case of an NRI personal loan, it is compulsory to have a co-applicant who is a close family member of the applicant and must reside in India.
Need Loan Assistance?