Obtaining a home loan in India involves three primary stages –
- Loan application and approval
- Home loan sanction
- Disbursement of the loan amount
Once your home loan application is approved, your property and documents are reviewed and verified. If satisfactory, your loan amount is sanctioned by the lender. Lastly, the amount is disbursed in your bank account as per the loan agreement.
Here’s a step-by-step home loan guide for availing of a home loan in India.
Home Loan Sanction Process
Now, once your home loan application is approved, lenders decide your home loan eligibility and the sanction limit based on factors like age, income, job stability, etc. Moreover, other factors like your credit score, loan repayment history, and outstanding payments also determine the sanctioned home loan amount.
Again, the approval process involves three steps.
Verification of documents
Lenders ask you to furnish proofs of the following –
- Address and identity proofs
- Bank statements
- Aadhar card copies
- House purchase agreement
Assessment of credentials
Lenders perform a rigorous background check to verify the accuracy of your personal information. If found incorrect, lenders can draw back the approval of the home loan.
Lastly, lenders conduct a personal, one-on-one interview to understand the purpose of your home loan.
Once the assessment is done, lenders issue a confirmation letter stating the sanctioned loan amount. The letter serves as a proof of your home loan eligibility and is valid for six months.
After the sanctioning of the home loan comes the disbursement process.
Home Loan Disbursement Process
Once the loan is sanctioned, you receive a home loan offer letter stating the following –
- Disbursement schedule
- Loan amount
- Rate of interest
- Type of home loan interest rates
- Mode of repaying the house loan EMI
- Loan tenure
- Terms and conditions of the loan
Now, if you agree with the stated terms and conditions, sign and submit the offer letter along with your property documents. Lenders use the property documents like NOC and property seller to legally assess the residential property.
Once validated and verified, you can move to the next phase i.e. paying stamp duty, registration, and signing the home loan agreement. However, before the home loan is disbursed, you must make the down payment which is usually 20% of the overall property cost or as per your lender’s terms.
At last, lenders can disburse the loan amount either in stages or in full, based on the construction stage of the residential property. You can also request the disbursement either online or offline.
Overall, the home loan sanction and disbursement process is not as difficult as it seems. Prepare the necessary documents and recheck agreement clauses before signing the dotted line, to secure the best deal.
To obtain easy home loans at attractive home loan interest rates, check out various financial institutions that provide housing loans.