A decade back, the home loan application process was a tedious and time-consuming process with lengthy paperwork. Digitisation has removed such hassles and applying for home loans today is easy, fast, and seamless and can be completed in a few simple steps.
To help you further, here is a detailed step-by-step guide to applying for a home loan.
Home Loan Application: Step-by-Step Procedure
After you have calculated your home loan eligibility and monthly EMIs via simple, online home loan calculators, the next thing you need to do is apply for your home loan.
The application process for home loans can be completed within six quick and straightforward steps –
Step 1 – Filling in the Application
The very first step is to fill in the home loan application form. The same can be done offline or online. In this step, you will be required to enter in basic details about yourself such as full name, phone number, type of employment, place of residence and its pin code, etc.
Step 2 – Document Submission
Once you’re done with filling the home loan application and have received your home loan eligibility, the next step is to furnish the necessary home loan documents, which include –
- Age Proof Documents – valid Passport/Driving License/Life Insurance Policy/Birth Certificate/PAN Card/School Leaving Certificate
- Identity Proof Documents – Voter ID/Passport/Aadhar Card/PAN Card/Driving License
- Income Proof Documents – Last six months’ operative current account statement/Bank statements for the last six months of CC/Copy of the last three years’ P/L Projection Statement
- Address Proof Documents – Utility Bills/Bank Statements/Voter ID/Property Tax Receipt
- Business Proof Documents (for the self-employed) – copy of the last two years’ Income Tax Returns/Registration Certificate for Commencement of Business
- Existing Loan Details – to be given via bank statements
- Processing Fee Cheque – to be issued to the business account
Step 3 – Verification
After you have submitted all your home loan documents with the lender, the lender will now verify and authenticate your documents. For example – They may contact your office or relevant organisation to verify your employment, designation, salary, etc.
Moreover, in this step, the lender will also carry out a credit or CIBIL score check – an important determinant, not only of home loan eligibility but also of home loan interest rates.
If your home loan application passes such tests, it will be passed on to the next step.
Step 4 – Inspection of Property
After your home loan application has been verified, the lender will have a team to inspect the property that you intend to purchase. The inspecting officers will check your property’s value, its condition, location, its builder’s credentials, etc. Once they are satisfied with their inspection, they will give the green signal – your home loan application will reach the second-last step.
Step 5 – Home Loan Approval
Once your home loan application has been approved, you will receive the sanction letter (soft or hard copy). The sanction letter will specify your home loan eligibility – Principal loan amount, rate of interest, and loan tenure. Other terms, conditions, and policies of your home loan will also be mentioned in the sanction letter.
Step 6 – Loan Disbursal
After your home loan application has successfully made its way through all these steps and has been approved, all that is now left is loan disbursal. Meaning, the final step involves your home loan amount being transferred to your bank account.
Before applying for a home loan, make sure that you do not just meet the eligibility criteria but also check the EMI amount (principal amount + home loan interest) you need to shelve out each month using an online home loan EMI calculator.