The Government has taken several initiatives to provide affordable loans to all Indians for making a home. Therefore, the housing loan process has become easier and comprehensive for all. The eligibility and interest rates are also made affordable by financial institutions.
However, an intending borrower should know each step involved in home loan process to make an informed decision.
Steps in housing loan process
The following steps summarise home loan process:
- Application
On website of every lender, there is a provision to make an online application. Here a borrower has to fill up all details, including name, age, contact details, type of employment, yearly income, pan number, etc.
Along with these, borrowers have to pay applicable processing charges. Mentioning any wrong information can lead to rejection or slow down the approval.
- Documentation
Along with the application, copies of documents are required for a home loan approval. It includes:
- KYC
- Form 16 and salary slips of last 6 months (for salaried employee).
- Bank account statement.
- Business proof (if a borrower is self-employed)
- Property papers
- Document processing and verification
In this stage, the lender verifies the home loan eligibility, authenticates the documents, checks on CIBIL score, and initiates the next step.
If all documents required for home loan and reports are satisfactory, then will move forward to sanction.
- Sanction letter
After successful completion of all above mentioned steps, the lender provides a sanction letter. It contains information like:
- Principal loan amount.
- Home loan interest rate.
- Type of interest rate like fixed or floating.
- Payment of secure fees
Post signing the sanction letter, the borrower has to pay one-time secure fees.
- Legal check
Before disbursing the loan, the lender will finally check the legalities of the property chosen by sending representatives to the site.
- Loan agreement
After all checks and verifications are satisfactory, the lender will provide a loan agreement in the final stage.
- Disbursal
As per the terms and conditions, the financial institution will disburse the loan.
To maximise home loan benefits, individuals can avail pre-approved offers. These simplify loan processing significantly. These offers are available on various financial products like home loans, loan against property, etc. Individuals can check their pre-approved offers by inputting essential contact details with the lender.
Eligibility for housing loan
Following are the factors that can affect home loan eligibility criteria:
- Should be a resident of India.
- A salaried employee must be 3 years in job and businessman should be more than 5 years in business.
- The company employing the applicant should be a stable MNC, public, or private sector.
- The age of the applicant should be between 23 – 70 years.
Different lenders include different terms and conditions under eligibility criteria. The applicant should read all terms and conditions thoroughly and then select the lender.
How to calculate the EMIs involved in the home loan process?
Before selecting a lender, one should check the home loan interest rate, the total cost of borrowing and compare it to get the best deal.
The manual calculation of EMI before taking home loan is time-consuming and has chances of error. A home loan EMI calculator can best resolve this matter in a fraction of a second with 100% accuracy.
Steps to calculate EMI through an online calculator:
- Browse the website of the respective lender or financial institute.
- Open the online EMI calculator for a home loan.
- Now input the principal amount, interest rate, and tenor.
- Click on Calculate.
Now the result will show monthly EMI based on tenor and interest rate.
Hence, following the steps above, individuals can complete the home loan process successfully. It also helps them secure the funds quickly.
