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 Home loan application process in India

 Home loan application process in India

Applying for a home loan is the first step towards owning the house of your dreams. While the application process is quick and easy to follow, not everyone is familiar with it. If you are a potential homebuyer looking for a home loan, it is imperative to be well-versed in the lender’s home loan eligibility criteria and the disbursal process for hassle-free loan approval.

Here are the steps involved in obtaining a home loan.

Filling out your home loan application form

The process begins with applying to the lender either online or offline. They require you to fill in information such as personal details, residential address, employment, annual income, property details, and so on.

Home loan eligibility criteria in India

Before proceeding with the home loan application process​, you must understand whether you’re eligible for it. All lenders have set specific home loan eligibility criteria, and if you meet the requirements, your chances of loan approval are higher. The most common eligibility factors are:

  • Age: You must be between 21 and 65 years of age. 
  • Employment status: You can either apply as a salaried individual with a stable job or a self-employed individual with a steady income source.
  • Income: You must earn at least Rs. 30,000 per month. 
  • Credit score: Your credit score must be 750+, reflecting your ability to repay the loan. 

Documents required for a home loan application

Once you have filled out the application form correctly, the lender will ask you to submit a list of documents along with it. This includes:

  • Identity proof
  • Income proof
  • Address proof
  • Employment details
  • Proof of income
  • Bank account statements
  • Property details (if the loan is finalized)
  • Payment of the processing fee

Payment of processing fee

After successful submission of the application and the required paperwork, you will have to pay a non-refundable processing fee to the lender. Most lenders charge a fee between 0.25% to 0.5% of the loan amount for the home loan application process. However, you can also negotiate to waive off this charge.

Verification and credit check in the home loan process

The lender will then assess your application and authenticate your documents. They will get in touch with you at your residence or your workplace to validate the information and credentials you have provided. Moreover, they will also run a credit inquiry and check your CIBIL score to determine your financial stability and repayment capacity.

Issuance of home loan sanction letter and terms

After the lender finds your application satisfactory, they will move forward with the home loan process and offer you the sanction letter. It contains the following details:

  • Loan amount
  • Rate of interest
  • Type of interest rate- fixed or floating
  • Repayment tenure
  • Other terms and conditions associated with the loan

Make sure that the letter mentions the home loan interest rate and other terms as discussed. You have to sign a copy of the sanction letter and revert to the lender with your acceptance.

Property verification and valuation process

Before disbursing the loan, the lender will check the property you intend to purchase. You will have to submit the original copy of the property-related documents. They will legally inspect the site to determine that the title is clear of any dispute. Similarly, they will run a technical valuation in case the property is under construction.

Final loan disbursal and agreement signing

Once all the aforementioned formalities are successfully carried out and you agree with the loan terms, the lender prepares the documentation and begins with the loan registration. Home loan processing time can take up to 2-3 weeks, depending upon the lender. After you sign the final agreement, the lender will disburse the loan as per the terms.

Online home loan application process: How to apply digitally?

Understanding the online home loan application process, step by step, is essential to ensure that you make no mistakes and have your loan sanctioned as early as possible. The online process eliminates the need to visit a branch physically. Check out the online home loan process step-by-step below:

  1. Visit the lender’s official website.
  2. Navigate to the dedicated Home Loan page.
  3. Press ‘Apply’.
  4. Enter your mobile number and verify with the OTP. 
  5. Fill out the loan application form with basic details such as name, address, contact, employment details, etc. 
  6. Upload the necessary documents. These include proof of identity, address, and income. 
  7. Submit the form once you’ve completed it with accurate details. 
  8. Await the lender’s home loan verification process and approval. 
  9. Once approved, you will receive the loan amount in your account. 

Home loan processing time and approval timelines

There are many steps in the home loan application process for both the borrower and the lender. It is not a one-day process. When you apply for a home loan online in India, it starts with you submitting your loan application and required documents, followed by the lender’s verification and assessment before disbursal. Any confusion at any step can make the process longer. 

To minimize their risks, lenders ensure that the information you’ve provided is correct and that you are capable of repaying their loan. They study your profile and the property details. If all documents are valid and accurate, the processing time and approval timeline for salaried professionals is about 4 to 5 working days. On the other hand, self-employed applicants can expect approval in 7 to 10 working days.

Tips to avoid home loan application rejection

A home loan application can be rejected due to various reasons, including low credit score, incomplete documentation, income instability, and property issues. You must eliminate all such challenges before initiating the home loan process. Here are some tips that can help avoid home loan application rejection:

  • Improve your credit score: Pay all your dues on time to achieve a high credit score and increase the likelihood of loan approval. 
  • Make sure your credit report is updated: Review your credit report periodically – annually or bi-annually – to ensure there are no errors and it is accurately updated. 
  • Keep all documents ready: Check the list of documents the lender requires and arrange them beforehand. 
  • Do not change jobs frequently: Job hopping reflects income instability, reducing your chances of loan approval. 

Benefits of applying for a home loan in India

Many people consider a home loan a financial burden. However, it has plenty of benefits. 

  1. Accessible homeownership: With the quick online home loan application process, securing a home loan has become easier than ever. Once you have the funds, you can buy, construct, or renovate your home without having to wait for years to save enough money. 
  2. Financial discipline: Monthly EMIs help you develop the habit of budgeting and saving. They teach you how to prioritize your expenses, resulting in better financial management skills. 
  3. Tax deductions: A home loan makes you eligible for tax deductions on principal and interest repayments under Section 80C and Section 24(b), respectively. 

Conclusion

Looking for a quick and affordable home loan? Tata Capital is here to put an end to your financial worries! With maximum eligibility, minimal paperwork, and 100% online application, our loan processing is easy and smooth. Besides, you can enjoy a flexible tenure for convenient EMI payments. Use our home loan EMI calculator and get started today!

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FAQs

What are the steps in the home loan application process - step by step?

The home loan process, step-by-step, is as follows:

  1. Select a lender and assess your eligibility.
  2. Submit the application form and necessary documents.
  3. Allow the lender to complete borrower verification and property evaluation. 
  4. Receive the sanction letter if your loan is approved. 
  5. Share your agreement for the terms mentioned in the sanction letter. 
  6. Await funds transfer.

How can I apply for a home loan online with Tata Capital?

You can apply for a home loan online on Tata Capital’s website. Head to the designated home loan page and press “Apply”. Enter the required details, upload the necessary documents, and submit the form. A representative will reach out to you for verification. Complete the formalities and await loan approval. 

What documents do I need to submit for a home loan application?

The documents required for the home loan process are identity proof, address proof, income documents like salary slips or ITR, bank statements, and property papers. Self-employed applicants may need to submit business financials. Do check with the lender if they require any additional documents to verify your profile. 

How long does the home loan process take in India?

In India, the entire home loan process takes 2 to 4 weeks. However, this varies from lender to lender. If you opt for the pre-approved loan offer, you can receive the funds much faster. The timeline depends on how long it takes to complete property verification, legal checks, and documentation. If everything is accurate, your loan process can be completed within 72 hours.  

What is the home loan processing fee, and can it be waived?

A home loan processing fee is a one-time charge for handling your application. It is usually a small percentage of the loan amount, ranging between 0.25% and 5%. Some lenders waive or reduce the processing fee during the festive season or under special schemes. 

How does verification and credit scoring affect my home loan approval?

Lenders verify your income, employment, property details, and credit score before approving a home loan. If you have a high credit score and stable income, your approval chances and loan terms improve, whereas if you have low scores, irregular income, or incorrect details, it may lead to delays or rejection.

What should I check in the home loan sanction letter?

When you receive the home loan sanction letter, you should check the sanctioned loan amount, interest rate, tenure, EMI, processing fee, and special conditions. Besides, you must review clauses on pre-payment, foreclosure charges, and validity period to avoid last-minute surprises or confusion.

Can I track my home loan application status online?

Yes. After you complete the online home loan application process, most lenders provide an application ID. You can use this ID to track the status on their website or customer portal. You can also check your application status using your registered mobile number.

What are the common reasons for home loan rejection, and how can they be avoided?

The common reasons for home loan rejection include low credit score, high existing loans, unstable income, or unclear property documents. You can avoid delays or rejection by maintaining a good credit score, reducing debts, submitting accurate documents, and choosing a loan amount suited to your repayment capacity.

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