What is the step-by-step procedure to get a home loan?
Getting a home loan involves a few key steps that help ensure the process is smooth and secure. It usually begins with checking your eligibility, submitting the required documents, and filling in the loan application. Then, the lender verifies your documents, checks your credit profile, and inspects the property. Once everything checks out, you receive a sanction letter. After agreeing to the terms, signing the documents, and paying the necessary charges, the final loan amount is released directly to your bank account.
In this article, we will explain everything you need to know about House Rent Allowance, including its meaning, benefits, and the rules around exemptions and tax savings.
Step-by-step home loan process
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While the Home Loan process involved many steps, they are taken quickly, and you can get your loan just 48 Hours* from Bajaj Finserv. Before all, you can also check the interest payable and the EMIs amount using our home loan EMI calculator to get an estimation.
Here are the steps in more detail.
Step 1: Fill the loan application form
The first step is filling the application with details like your name, phone number, pin code, type of employment, and more. Our representative will get in touch with you to move forward with the application procedure.
Step 2. Documentation process
Our representative will come at your doorstep to collect the required documents*, which include:
- KYC documents – Passport, Driving License, Aadhaar Card, Voter ID Card (any one)
- Your employee ID card
- Salary slips of the last 2 months
- Bank account statements for the last 3 months (salaried) / 6 months (self-employed)
- Document of proof of business of minimum 5 years (for businessmen/ self-employed individuals)
- Documents of the property to be mortgaged
*Please note that the list of documents mentioned is indicative. During loan processing, additional documents may be needed.
Step 3. Document processing and verification
The lender will process and authenticate your home loan documents. They may contact your workplace or relevant organisation to confirm your employment or occupation.
In this step, they will also conduct a credit enquiry to check your CIBIL score and credit report. Your loan application will move to the next step only if all the documents are in order, and your CIBIL score and credit report are satisfactory.
Step 4. Sanction letter
You will receive a home loan sanction letter after successful completion of all the above steps. A sanction letter usually contains the following details:
- Loan amount
- Rate of interest
- Type of interest rate, fixed or variable
- Repayment tenor
A sanction letter may also contain other terms, conditions, and policies of your home loan. You have to sign a copy of this letter and send it to the lender to accept their offer.
Step 5. Secure fee payment
You have to pay a one-time secure fee after you sign the sanction letter. The lender may ask you to pay this fee at an earlier time as well.
Step 6. Legal and technical check
The lender will perform a legal and technical check before disbursing your loan. They will send representatives to the property site for inspection.
Step 7. Loan agreement and disbursal
You will receive the final agreement after the lender has performed all their checks. Finally, your home loan amount will be disburse as per the terms.
Important links: Home Loan Interest Rates | Home Loan Eligibility Criteria | Home Loan Balance Transfer | Joint Home Loan | Home Loan Tax Benefits | Home Loan Subsidy | Housing Loan Top Up | Rural Home Loans
Documents required for home loan application process
When applying for a home loan, having the correct documents ready can make the process faster and easier. Lenders require several documents to verify your identity, income, and property details. Here is a list of documents you typically need to submit:
Proof of age: Lenders usually offer home loans to individuals between 21 and 65 years of age. To confirm your age, you will need to submit government-issued documents such as a PAN card, Aadhaar card, passport, or driving licence.
Proof of identity: To verify who you are, banks need a valid identity proof with your photograph. Acceptable documents include PAN card, passport, Aadhaar card, voter ID, or driving licence.
Proof of address: This confirms where you live and can be your Aadhaar card, utility bills, passport, driving licence, voter ID, or even a Ration Card.
Proof of income and employment: If you are salaried, you must submit salary slips, your offer letter, increment letters, and income tax returns for the last three years. If self-employed, submit your bank statements, profit and loss statements, and proof of business ownership.
Property documents: You also need to submit documents related to the property you are purchasing. These include the sale deed, allotment letter, builder’s NOC, bank statements for payments made, and in case of a construction loan, an estimate of the construction cost and an approved layout plan.
What are the things that affect your home loan approval?
Getting a home loan does not only depend on submitting the right documents. Several key factors can affect whether your loan gets approved.
Age: Your age plays an important role. Lenders prefer younger applicants with a longer repayment window, usually between 21 and 65 years.
Monthly income: A stable and sufficient income is essential. If your income is low or your job history shows frequent changes, it may reduce your chances of getting the loan.
Property condition: Lenders also assess the property’s age and condition. If the property is very old or does not meet certain standards, the loan may be rejected.
Credit score: Having a good credit score (usually 750 or above) shows that you are responsible with repayments. It can improve your chances of approval and may even help you get a higher loan amount or better interest rates.
If you have a CIBIL score of 725 or above, you could qualify for attractive home loan rates with Bajaj Finserv. Their streamlined process ensures loan approval within 48 hours*, making your home buying journey faster and hassle-free. Check your loan offers with Bajaj Finserv today. You may already be eligible, find out by entering your mobile number and OTP.
Always check these factors before applying to improve your chances.
Things to remember before starting the home loan process
Before starting the home loan process, it’s essential to plan and prepare thoroughly.
- Check your credit score: A good credit score improves eligibility and helps secure better interest rates.
- Assess your budget: Ensure you can manage monthly EMIs without straining your finances. With Bajaj Housing Finance, you can get a home loan with EMIs starting as low as Rs. 687/lakh*, making homeownership more affordable. Their flexible tenure options up to 32 years help you choose EMIs that fit comfortably within your budget. Check your eligibility for a home loan from Bajaj Finserv now. You may already be eligible, find out by entering your mobile number and OTP.
- Prepare documents: Keep identity proof, income proof, and property documents ready.
- Compare lenders: Research interest rates, processing fees, and repayment terms across lenders. When comparing home loan options, consider Bajaj Housing Finance for their competitive rates starting at 7.49%* p.a., no foreclosure charges for individual borrowers, and access to over 5,000 approved projects for faster processing. Check your loan offers from Bajaj Finserv today. You may already be eligible, find out by entering your mobile number and OTP.
- Understand loan types: Choose between fixed or floating interest rates based on your preference.
- Evaluate loan-to-value ratio: Know the down payment required for your desired loan amount.
By following these steps, you can navigate the home loan process with confidence and ease.
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Frequently asked questions
The home loan processing time can vary significantly based on several factors and the specific procedures of the lending institution. The home loan process involves multiple steps, including application submission, verification, approval, and disbursal. Typically, the processing time for home loans ranges from a few weeks to a couple of months. Factors influencing this timeframe include the completeness of your application, the complexity of your financial situation, and the lender's efficiency. By understanding the home loan processing time, you can better plan your home purchase and manage expectations for when funds will be available.
As the name suggests, full disbursement refers to when the lender releases the entire home loan amount, as opposed to releasing it in parts. When you purchase a ready to possess property from a developer or a seller, the lender releases the entire sum. On the other hand, if you purchase an under-construction property, the lender will release the sum in parts, in line with the construction progress.
To avail of a home loan, you typically need to submit KYC documents, income and financial documents, and property-related documents. The housing loan procedure may require additional documentation if the initial submissions lack clarity. For example, while a title deed and tax receipts are essential property-related documents, lenders often request a project plan to ensure the property’s legitimacy and development status. This additional documentation helps lenders evaluate the property and your application more thoroughly, facilitating a smoother approval process. By understanding the housing loan procedure and preparing the necessary documents in advance, you can expedite your loan application and avoid potential delays.
The salary required for a home loan depends on factors such as the loan amount, interest rate, and tenure. Lenders typically assess the borrower's Debt-to-Income (DTI) ratio, aiming for a 40% or lower ratio, where total monthly debt payments, including the home loan, do not exceed 40% of the gross monthly income. Actual calculations vary based on specific lender criteria, interest rates, and the borrower's financial profile, including credit score and existing obligations.
With Bajaj Finserv, your salary requirement depends on various factors including your age, credit score, and existing obligations. We offer personalised loan amounts up to Rs. 15 crore* based on your individual eligibility profile. Check your eligibility for a Bajaj Housing Finance Home Loan today. You may already be eligible, find out by entering your mobile number and OTP.
To enhance your chances of easily getting a home loan in India, maintain a good credit score, save for a substantial down payment, ensure stable employment and income, reduce existing debts, choose the right lender by comparing options, complete documentation accurately, and seek professional advice for personalised guidance.
Bajaj Finserv makes getting a home loan easier with their doorstep document collection service, 48-hour* approval process, and access to over 5,000 pre-approved projects. Their streamlined application process eliminates multiple branch visits and reduces paperwork hassles. Check your loan offers with Bajaj Finserv now. You may already be eligible, find out by entering your mobile number and OTP.
- Here is the criteria for getting a home loan:
You must be an Indian citizen residing in India - 23 years to 67 years for salaried applicants, 23 years to 70 years for self-employed applicants
*The upper age limit is considered as the age at the time of loan maturity - You should have a CIBIL Score of 725 or higher
- Occupation: salaried employee, a professional individual, and a self-employed individual
The processing fee for a home loan typically ranges up to 4% of the loan amount, depending on the lender. This fee covers the cost of processing your application and is part of the overall housing loan procedure.
The stages of approval for a home loan include application submission, document verification, credit assessment, and final approval. Understanding each stage helps streamline the housing loan process, ensuring a smoother experience from application to disbursal.
Lenders verify the property through legal and technical checks. Legal verification ensures clear ownership and absence of disputes, while technical verification assesses the property's market value and condition. This process confirms the property's eligibility for a housing loan and safeguards the lender's interest.
The loan amount is determined based on the borrower's income, repayment capacity, credit score, and the property's value. Most lenders provide a percentage of the property's value, known as the Loan-to-Value (LTV) ratio, with the borrower funding the remaining amount as a down payment.
