Saturday, April 20, 2024

What is the Procedure to opt for a Home Loan?

The demand for a home loan has always been on the rise due to its borrower-friendly features like affordable interest rates, long tenor, simple eligibility, etc. A home loan procedure varies from lender to lender. However, the basic home loan process remains the same.

However, with rapid digitisation, the application process of home loan also evolved drastically. For instance, it takes only a few minutes to apply for a home loan. Besides the application process, individuals should also have a clear idea of total loan processing till its disbursal.

Steps to Avail a Home Loan

Following are steps to avail a home loan:

1. Fill application form

  • To apply for a home loan, borrowers have to first visit a lender’s website.
  • Open home loan application form.
  • Provide monthly salary and the loan amount required.
  • Enter additional details like Date of birth, PAN card number, property details, etc.
  • Submit the form online.

Upon submitting this application form, representatives from the lender will contact.

2. Attach documents required for a home loan

Documents required for a home loan may be slightly different for salaried and self-employed individuals. Following are some basic documents for a home loan:

  • KYC documents
  • Form no. 16 or latest salary slips for salaried individuals.
  • Business vintage of at least 5 years for self-employed applicants.
  • Bank statement for the last 6 months.

3. Approval process:

After checking the documents provided, lenders also initiate a rest checking process before approval.

Following are the factors that can affect their home loan eligibility:

  • Credit score
  • Borrower’s credit profile
  • Borrower’s monthly income
  • Current employment details
  • Nature of business
  • Property to be purchased

After considering all crucial factors, lenders give loan approval, and applicants receive a loan sanction letter.

4. Home loan processing fee

In general, borrowers have to pay a certain amount to lenders for processing home loans. The processing fee differs depending upon lenders. Hence, before applying for a home loan, one should compare the processing fee, a one-time payment.

In general, the processing fees range from 0.5% to 1%. But it may go up to 2% to 3% sometimes. Hence, individuals should also know the important home loan fees and charges associated with home loans.

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5. Legal check of the property papers

After the approval, lenders initiate the property papers verification process. The applicant has to submit all the documents related to the property, NOC from the primary legal owner etc.

Once the documents are submitted, lenders will send them to the legal team. They will scrutinise and verify all the documents. If everything is found valid and passes the stringent process, lenders will approve the loan.

Besides, lenders also initiate an on-site inspection of the property.

6. Loan disbursal

The final process is the loan disbursal from the lenders. The total process may take a considerable amount of time.  The loan disbursal time can vary from lender to lender. In general, it takes 3 to 4 weeks for the disbursal. If there is any delay, consulting with the concerning lender can help.

However, borrowers can also benefit from the pre-approved offers extended by esteemed lenders. They are instrumental in expediting and simplifying loan processing. These offers are available for various financial products like housing loan, loans against property etc. You can check your pre-approved offer by providing your important credentials.

Application procedure for a home loan is quite simple. However, checking the eligibility and knowing the complete process is important besides just knowing what home loan is.

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