Your Queries on Loans Answered: NRIs Must Pay EMIs on Home Loan from NRE Account
Managing Home Loan EMIs from Abroad
Non-Resident Indians handling rupee-denominated home loans must pay their EMIs through a non-resident external (NRE) account. When salary or income is received in foreign currency, it should first be remitted to the NRE account in India. The funds are converted into rupees based on the prevailing exchange rate, after which EMI payments can be made.
“I had purchased a flat with a bank loan five years ago. Now, I will be relocating to Canada. Can I pay the EMI in dollars from my savings bank account in Canada and link the home loan account with it for ECS?” — Avinash Shah
The bank loan is in rupees. Therefore, payments cannot be made directly in dollars from abroad.
Prepaying Credit Card EMI Conversions
“I had converted my outstanding credit card amount into a one-year EMI. Now, I have received some money from a life insurance policy. Should I prepay the full amount, and will there be any penalty?” — Ashok Purohit
It is advisable to repay the full outstanding on the credit card loan early. Generally, no penalty is charged for such prepayments.
Small Business Funding Options
“My wife needs Rs 15 lakh as a small business loan. What type of loan will be better for her?” — Mahesh Singhal
If the business is already planned and a project report has been prepared, she should apply for a small business loan, which comes with lower interest rates. If the business idea is still being tested, a personal loan would be more suitable, though interest rates will be higher.
Summary
NRIs must route rupee-denominated loan EMIs through NRE accounts, credit card prepayment typically incurs no penalty, and loan choices should align with business readiness.
Author’s Summary: The article explains how NRIs must manage India-based EMIs, optimize loan prepayments, and choose appropriate financing depending on business maturity.