What is the TAT Full Form and Turnaround Time in Home Loan Processing?

TAT full form is turn around time. It refers to the total time required to complete a transaction or process from start to finish. In lending, TAT is an indicator of process efficiency for various lending operations, such as document collection, loan approval and disbursement, or transaction processing. TAT affects both you and the lenders as it is directly correlated with service delivery and, hence, customer satisfaction.

Understanding TAT is crucial for time-based financial planning and requires knowledge of the various time intervals involved in banking operations, such as those related to home loans. This article examines what is turnaround time TAT in home loan processing in detail, including factors that affect it, calculation methods, and other relevant aspects.

Understanding TAT (Turnaround Time) in Home Loan Processing

1. Definition: Turnaround time refers to the total time taken for a loan from request initiation to final resolution. It is a critical metric that reflects a lender’s efficiency.

2. Components: Regarding home loan processing, TAT encompasses the following steps, each with a specific time frame for completion:

• Document collection
• Application review
• Approval
• Fund disbursement

Here, TAT includes the time taken from document collection to the final fund disbursement. The time spent on each step in the lending process contributes to TAT.

3. Effect on customer experience: Financial institutions and lenders focus on reducing TAT to improve customer experience. A shorter TAT indicates operational efficiency, which in turn leads to a satisfactory customer experience. A longer TAT leads to a bad customer experience and potential application withdrawal. Imagine the interminable frustration of waiting for weeks to hear back from a financial institution for a home loan.

4. Optimizing TAT: Reducing TAT involves streamlining processes, effectively leveraging technology, and ensuring efficient execution of each step. By optimizing TAT, financial institutions can enhance service, eliminate bottlenecks, and maintain a competitive edge in the market.

Benefits of a fast TAT for home loans

A fast TAT offers multiple benefits for both borrowers and lenders. These include:

1. For borrowers

• Financial security: As a borrower, when you apply for a home loan, you want it to be approved as quickly as possible. This aids in proper financial planning and subsequent financial security.
• Opportunity advantage: With a rapid TAT, you can take advantage of limited-time property deals as your loan gets approved quickly.

2. For lenders

• Increases competitiveness: For lenders, a faster TAT makes them more competitive in the already cut-throat home loan market.
• Improves business: Furthermore, when their processes are streamlined and the turnaround time (TAT) is low, the lender’s staff can handle a higher volume of loan applications more efficiently.
• Enhances customer trust: Finally, a rapid turnaround time (TAT) improves customer trust in a lender.

How to calculate TAT online?

To calculate TAT online accurately, follow the steps given here:

1. Identify the start and end points

The first step in TAT calculation is determining the accurate start and end points of the process. For a home loan, the start point is usually application submission, and the endpoint is loan disbursement.

2. Use online tools

Make use of the various online tracking tools offered by the lenders. Most lenders, such as Tata Capital, provide real-time status updates on their dashboards, including the stage at which your application has reached and the estimated time interval for the completion of that particular stage.

3. Record time intervals

From the previous step, record the time interval for each step from application submission to document verification, loan approval, and fund disbursement.

4. Calculate the total duration

Add the duration of each step in the home loan process to get the total process duration. Ensure that additional intermediate steps (for example, public holidays) that can affect TAT have been accounted for.

5. Monitor and analyse

Review the TAT data to identify any delays and inefficiencies as well as recurring patterns that signal a bottleneck.

Example of TAT (turnaround time) calculation

Here is an example to help you understand TAT calculation.

The actual time taken for each step can then be written as:

• Application submission:  0 hours
• Document verification: 2 days, 4 hours
• Loan approval: 3 days, 6 hours
• Fund disbursement: 4 days, 8 hours

The time taken by the last step in the process, i.e., fund disbursement, gives the TAT.

Key factors affecting TAT (turnaround time)

The key factors that affect TAT are:

1. Process complexity: The complexity of a process has a significant impact on TAT. The more complex the process, the higher the TAT.

2. Documentation requirements: Document requirements such as completeness and accuracy increase TAT. If a customer submits an incorrect document, the rectification increases TAT.

3. Technology and systems: The tools and technology employed by the financial institution also impact TAT. Utilizing advanced digital systems for home loans streamlines processes and reduces TAT.

4. Staff efficiency: Well-trained staff in a financial institution can expedite processes with accuracy, leading to a rapid TAT

5. Regulatory compliance: Compliance with regulatory standards can impact TAT. Adhering to regulations increases processing time and can include additional steps leading to a higher TAT.

Key details About Tata Capital’s home loan

Are you seeking a reliable lender for your home loan with quick turnaround time? Look no further than Tata Capital.

Tata Capital, the financial arm of the eponymous Tata Group, has been a stalwart of the lending industry for decades. It offers home loans for new property, under-construction homes, or land purchases at competitive interest rates, with a hassle-free application process and minimal documentation requirements. Use our online EMI calculator for financial planning and apply for a home loan with Tata Capital today!