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Decoding the Home Loan Process in India

  • Highlights

  • Home loan application requires a set of valid documents

  • Income, age, and current liabilities determine the loan amount

  • Lenders charge a processing fee prior to loan disbursal

  • You are given an offer letter outlining the loan’s terms and conditions

Get closer to the next milestone of your life and buy your dream home. While the home loan process may have been intimidating and complicated earlier, it is simple once you know the basics.

Loan application

The first thing you need to do is fill out the loan application form that requires a few basic details and attach relevant documents pertaining to your:

- Personal identity and residential address
- Employment details
- Income
- Collateral

Make sure to fill the form with utmost care as any false or wrong information may lead to a loan rejection.

Processing fee

The lender usually charges a processing fee that’s between 0.25-0.50% of the loan amount. This fee is charged by the lender to maintain post-dated cheque services and for sending annual tax certificates.

Investigation and loan sanction

Once you’ve paid the processing fee, the evaluation of your application by the lender begins, after which they can either approve or reject it. The lender verifies your credentials and may visit your office or home. On the basis of your age, income, present liabilities, etc., the lender gauges your creditworthiness and repayment capacity.

Home Loan EMI Calculator

Offer letter

After you clear the loan sanction process, you’ll be given an offer letter by your lender, which you must read carefully. The offer letter is of two types, unconditional and conditional.

An unconditional letter is simple and straightforward and informs you that you’ve been approved for the loan. Important details of the loan like the rate of interest and tenor are mentioned in the letter along with the next step. A conditional letter contains the terms and conditions that you need to fulfil in order to be approved for the loan. It may also mention the special schemes of the lender valid at the time of application along with the loan details included in an unconditional letter.

Legal check

After you’ve accepted the offer letter, your lender will submit your original documents to their lawyers for an in-depth check for authenticity. This is to ensure that the title of the property is clear and it’s free of disputes.

Loan disbursal

The final step in the home loan process is the disbursement of the loan. Usually, the amount sanctioned is 80-85% of the total property cost. The loan amount is disbursed after the papers are signed and all the statutory requirements are fulfilled.

Pre-approved offers on home loans and others such as personal loan and business loan by Bajaj Finserv make it easy to avail finance. All you need to do is to provide some basic details and know your pre-approved offer.

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Product Guidance

A complete guide to applying for a home loan