Owning a home is a dream come true for many, and with affordable home loans, it's easier to make that dream a reality. So if you're planning to apply for a home loan, we've got you covered.
Our step-by-step guide will help you understand the entire home loan disbursement process. Let's get started!
What is the Disbursement of a Home Loan?
Disbursement means paying out money. For instance, disbursements are paid to purchase a house or run a business.
The disbursement process of a home loan comprises several levels. It includes meticulous verification of documents and a comprehensive technical and legal valuation of the property.
This process takes time, but ensuring that the loan is given out responsibly is necessary. After all the checks are done, the bank will let you know if your loan is approved.
The disbursement process of a home loan is vital. This is why it's crucial to familiarize yourself with this process to prevent potential obstacles.
Stages Before Disbursement of Home Loan
With the increasing use of technology in the banking industry, applying for a home loan is a breeze. To apply for a home loan, you can do it online. For this, you need to visit the lender's website and follow the below-given steps:
Stage 1: Fill out the application form
Filling out the home loan application form is the first step when applying for a home loan. In this, you must furnish your personal details and details about your income, employment, existing liabilities, property etc.
It will hardly take 10 to 15 minutes to complete the form.
Stage 2: Submit documents
The next step in the home loan disbursement process includes submitting the documents mentioned in the form. You need to upload self-attested copies of the required home loan documents.
- Age proof
- Photo identity proof
- Address proof
- Income proof
- Existing loan details
- Property documents
You can submit these documents online or offline. Some lenders provide doorstep service if you do not want to do that either. Their executive will pick up your home loan documents from your house or office.
Stage 3: Verification
It's the most critical stage in the disbursement process of a home loan. After receiving your documents, the lender will initiate a verification process. They will verify the documents submitted and your other details to validate the information provided by you in the home loan application
At this stage only, the lender decides your eligible amount based on your repayment capacity. After successfully verifying your documents, the lender sanctions your home loan amount.
Once your lender is satisfied, you can rest easy and wait for your loan approval. Next, we move into the final stage of getting your hands on your loan amount: the home loan disbursement process.
Disbursement of Home Loan – The Process
Stage 1: Request for disbursement
The first step in the home loan disbursement stage is to request loan disbursement with the financial institution. You may have to arrange for documentation depending on the type of property. Some documents include Sale Agreement, Encumbrance Certificate, NOC from Builder, Property Chain, Registration etc.
Stage 2: Processing the final loan amount
They will conduct a legal check on the property to ensure its title is clear and indisputable. They can also conduct the technical valuation of the property. Then, depending upon the evaluation, the verification of the necessary documents, the deposit of the home loan processing fee, and the requisite signatures by all parties, the final loan amount will be processed and disbursed.
Once your documents are verified, you'll receive a sanction letter. It will include the following details:
- Sanctioned amount of the loan
- Applicable interest rate
- Type of rate of interest
- Repayment tenure
- Mode of repayment
- Terms & conditions, and policies of home loan
Read the letter carefully. Once you sign it and send it to the lender, they will conduct a legal check on the property to ensure its title is clear and indisputable. They will also conduct a technical evaluation of the property.
After the requisite parties have signed the letter and proper verification is done, the final loan amount will be processed and disbursed.
Stage 3: Final disbursement
This is the last home loan disbursement stage. Once completed, the lender will issue a formal agreement and disburse the home loan proceeds per the agreed-upon conditions. Your bank account will reflect the home loan amount within 3 to 5 working days.
However, remember that it could be a total or partial disbursement. Of course, that depends upon the actual stage of construction of your property.
Summing up
If you're looking for a home loan, Tata Capital offers a swift disbursal process with competitive interest rates. To make things even more convenient, you can use our home loan EMI calculator to get an idea of how much you're eligible for and calculate the monthly repayment amount in advance.
With these tools, you can make an informed decision and enjoy a hassle-free home loan experience.
Apply now!
31 March 2023
5 mins read
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