In India, applying for a home loan involves a few straightforward processes. Additionally, the general application procedures are the same, even if they may vary slightly depending on the lender. Nevertheless, a house loan application process contains some standard steps, which are discussed below.
Home loan process in India
A home loan process in India involves a few common steps. Those include:
Step 1: Application
This is the first phase of applying for home loan is to get details about the applicant, including contact information, name, employment information, etc., are requested as part of the house loan application procedure. So, individuals should check home loan eligibility beforehand. After applying, a representative from the lending side will get in touch with the applicant to continue.
Step 2: Documentation
After submitting the application form, lenders will request a few documents from applicants. Some lenders can send a representative to collect and verify documents at the applicant’s address. Some of the documents needed for a home loan include:
- Address proof such as identity proof with address, utilities bill, etc.
- Identity proof such as PAN card, Voter ID, Passport, etc.
- Bank account statement
- Income proof
- Property documents
- Form 16 or recent salary slips
Step 3: Discussion with the lender
A conversation with their preferred lender is an important step in this process. For this, applicants must wait a few days after submitting the required paperwork and items. A lending institution can take the time to assess the details of the home loan based on their income and repayment history. Also, to learn more about the borrower in-depth, the lending institution can request a face-to-face meeting with the borrower.
Step 4: Sanction letter
The applicant will receive a sanction letter at this step. This letter will include information on the home loan, such as its loan amount, home loan interest rate, tenor, and type of interest. Also, this might consist of other terms and conditions in addition to generic information. It is essential to remember that you can use a home loan EMI calculator to estimate EMIs in advance. To obtain the EMI, a borrower must enter their loan amount, tenor, and interest rate.
Step 5: Fee payment
An applicant must pay a secured fee before or after the lender issues the sanction letter.
Step 6: Technical and legal check
Before releasing the funds for the home loan, the lender might conduct both a technical and a legal check. It’s crucial to remember that the lender might send an agent to the inspection location.
Step 7: Agreement and disbursal
Lastly, an applicant will get the final agreement from a lending institution following full verification. After that, a lender will disburse the applicant’s loan amount. Besides these procedures mentioned above, it is also essential to note a few eligibility criteria for a house loan. Borrowers can also opt for a home loan EMI calculator to know the monthly payables.
Although these parameters can vary with a lending institution, some general pre-requisites are –
- They must be citizens of India.
- Applicant’s age should be between 23 to 70 years.
- Prospective borrowers should have professional experience of more than 3 years.
- Self-employed applicants need to prove their business existence of more than 5 years.
Documents required for a home loan
- Voter ID
- Aadhaar card
- PAN card
- Driving license
- Recent salary slips
- IT returns
- Bank account details for the last 3 months
- Photocopy of property documents
In India, selected HFCs offer pre-approved offers that simplify and expedite loan processing. Such offers are available on various financial products like loans against property, home loans, etc. Borrowers can enter their name and contact number to check their pre-approved loan offers.
It is essential to note that a home loan application process can differ with lending institutions, and a few steps can be skipped or added depending on an applicant. So, it is important to check a lender’s website before applying.