Step-by-step guide to the home loan application process
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.
Home loan process step-by-step guide
A home loan is a financial arrangement where a bank or lender provides funds to help you purchase, construct, or renovate a residential property, which you repay over time in instalments. For many individuals, this is one of the biggest financial commitments they will make. That’s why it's important to understand how the home loan process works. From checking your eligibility and gathering documents to getting approval and disbursal, each step requires careful attention. For first-time borrowers, knowing the complete process helps avoid delays, ensures smoother communication with lenders, and increases the chances of loan approval at the best terms.
Planning to buy your dream home? Bajaj Finserv offers home loans up to Rs. 15 crore* with interest rates starting from just 7.49%* p.a. and flexible repayment terms up to 32 years. 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.
Step-by-step home loan process
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. 684/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 7.45%* 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 process begins with filling out an application form and submitting the required documents. These usually include proof of identity (such as PAN card, Aadhaar card, passport, or voter ID) and proof of address (such as utility bills, rental agreement, or passport). Once submitted, the lender verifies your details, evaluates eligibility, checks your credit score, and processes the application before approving and disbursing the loan amount.
The EMI on a Rs. 20 lakh home loan depends mainly on the chosen interest rate and loan tenure. For a repayment period of 20 years, the monthly instalment usually falls between Rs. 16,000 and Rs. 18,000. For example, at 7.45% annual interest, the EMI would be around Rs. 16,051. To know the exact EMI for your case, using an online home loan EMI calculator is the most accurate approach.
If your monthly salary is Rs. 25,000, you may qualify for a home loan of roughly Rs. 12 lakh to Rs. 20.85 lakh, subject to lender policies. The final amount depends on factors such as your credit score, existing debts, repayment history, and the property’s valuation. Most lenders prefer that your loan instalments do not exceed 40–50% of your salary, so maintaining a healthy debt-to-income ratio is crucial.
The home loan process generally follows four main stages. First is the application stage, where you submit forms and documents. Next comes underwriting, where the lender checks your eligibility, credit profile, and property details. The third stage is approval, where the loan is sanctioned based on successful verification. Finally, there is the closing or disbursement stage, where agreements are signed, and the approved loan amount is released to your account or the seller.
With a monthly income of Rs. 70,000, you could qualify for a loan ranging from Rs. 30 lakh to Rs. 45 lakh, depending on the lender and your repayment capacity. Many lenders use a general rule that allows borrowing up to 60 times your monthly income if your credit profile is strong. However, factors such as your credit history, ongoing financial commitments, and property value also affect the final eligible loan amount.
For a home loan of Rs. 30 lakh, the EMI can vary widely based on tenure and interest rate. For instance, for a period of 25 years at an interest rate of 7.45% p.a., the EMI is Rs. 22,072. The calculation considers the principal loan amount, applicable interest rate, and repayment duration. Since these numbers differ between lenders and can change over time, it’s best to use a reliable home loan EMI calculator online from Bajaj Finserv to find the exact amount suited to your borrowing terms.
