A personal loan is a great way to manage unplanned and urgent expenses without asking someone for financial help. As long as you have a steady income stream with which you can pay off that loan and you can find a trusted lender, you can finance any kind of expense with a personal loan. In many cases, lenders even offer personal loan interest rates that are much more attractive than what a typical credit card would charge.
But even though personal loans are easily accessible for resident citizens, non-resident citizens (NRIs) often wonder if they can apply for a personal loan in India or not. In this piece, we will discuss the eligibility of NRI applicants for personal loans and the special conditions applicable to them.
Let’s begin with the most basic question –
Can NRIs apply for a personal loan in India?
Yes, absolutely NRIs can apply for a personal loan. Financial service providers and lending institutions understand that many NRIs may have recently achieved this legal status and could be the sole earners for their families back home. Denying them this facility is unfair and impractical. Therefore, many banks and lending institutions have come up with custom personal loan solutions for NRIs.
What are the eligibility criteria for NRIs?
While applying for and getting a personal loan is very easy, there are certain eligibility criteria that NRI applicants have to fulfil before they can avail of this facility. These conditions are as follows:
- NRI applicants cannot get a personal loan on their own. They need to apply with a co-applicant who is currently residing in India.
- This co-applicant must be a close relative and not a friend or partner.
- The NRI applicant must be either self-employed or in-service for at least 1 year. The co-applicant who is residing in India may or may not be employed.
- Self-employed NRI applicants may be required to provide business and income proof for the past 3 years. For salaried NRI applicants, salary slips of the past 6 months may suffice.
- Some lenders may also require the NRI applicant to have an NRE/NRO account to disburse the personal loan.
- For resident Indians, a minimum income criterion of Rs. 15,000 per month is applicable. For NRI applicants, it can vary depending on the country of residence.
- Lenders may also require eligible candidates to be within the age group of 22-58 years.
Are there any special documents required?
Based on these eligibility criteria, for NRIs to complete their personal loan application successfully, the following documents are required:
- Identity proof (such as voter ID card, PAN card, Aadhar card, etc.)
- Address proof (local address of resident co-applicant as well as that of the NRI applicant)
- Bank statement (of the past 3-12 months)
- Salary slips or income proof (depending on nature of employment)
The only special documents which an NRI applicant may have to submit are the copies of their Passport and Visa. These are demanded by lenders to establish the genuine NRI status of the applicant.
Do the interest rates vary for NRIs?
Not at all! Personal loans are unsecured loans, and no collateral is needed before disbursing them. Therefore, loan providers often cover their risk through due diligence and charge comparatively higher personal loan interest rates. But there is no discrimination done between resident and non-resident applicants.
In fact, you can even use a personal loan EMI calculator to check how much interest you will pay against your loan principal, even before applying for a loan. Furthermore, since the whole application process is online, NRI applicants can easily check their loan eligibility, submit the required documents, and avail of personal loans from their preferred lender.