As economies, personal finances, are affected globally due to the Covid-19 crisis, for NRIs, home loan refinancing is the most viable option.

“NRIs may be steadfast patrons of property investments in India, but the current Covid-19 crisis has affected their personal finances, which are not immune,” said Shajai Jacob, CO-GCC, Anarock Property Consultants.

“Many NRIs settled in Europe, America and the Middle East who have bought real estate in India are considering refinancing their home loans. Job insecurity or not, this is an apt time for NRIs to rectify some ongoing equations and look at increased savings wherever possible,” he added.

Additional loan opportunity

Refinancing means taking a new loan to pay off one or more outstanding loans and like Indian residents, NRIs can opt for this route if they need to. Refinancing a home loan will result in a lower interest rate, or one can switch from a fixed to a floating rate or vice versa.

“In this scenario, refinancing can also be a viable option if an NRI wishes to avail an additional loan opportunity, or to top up the original amount borrowed. Refinancing is also a useful tool to consolidate debt,” explained Jacob.

For NRIs, home loan interest rates are extremely attractive, with some leading banks offering rates between 7.15 and 9.5 per cent. Interest rates could reduce even more — last month, the RBI had cut the repo rate by a whopping 75 basis points, bringing it down to 4.4 per cent from the earlier 5.15 per cent. The RBI has also reduced the reverse repo rate by 25 bps to 3.75 per cent to encourage banks to channelise liquidity and provide more loans to sectors, including housing.

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