Looking To Apply for a Home Loan in India? Here’s a Stepwise Guide
Purchasing a house is one of the crucial financial goals in anyone’s life. With an affordable Tata Capital home loan, Bank of Baroda Home Loanor home loan from any other suitable lender, your dream of buying a home can be fulfilled easily. As buying a home needs a lot of investment, availing a home loan to fund part of your financial requirement is extremely common in our nation and across the globe.
Years back, when there was no home loan, people saved surplus funds for many years and depended on unrecognized lenders to take up a few loans during requirement situations. However, with the evolving digital and consumer landscape, a lot has changed in the industry for the better. You can now avail of home loans at the most affordable interest rates with reliability and transparency. However, to make the right decision when it is about availing of a home loan, it is crucial to understand how BestHome Loan in India.
Here in this home loan guide, what they are, and how they function are major discussed points. Here’s all you must know about the home loan –
What is a home loan?
A home loan refers to the amount that an individual borrows from different banks and non-banking financial institutions for buying a property.
How does a home loan function in India?
The borrowed home loan amount borrowed by an individual is paid to builders or owners directly by NBFC and bank. The borrower is expected to make the payment of the loan proceed in the form of EMI over the chosen repayment tenure along with the interest component on top of the principal constituent.
For example, a loan equalingRs 25 lakh availed for a repayment tenure of ten years at a rate of interest of 9.55 per cent p.a. will entice a loan EMI of Rs 32,418. Also, the computations even show a loan that attracts a rate of interest of Rs 14 lakh over and above the principal component of Rs 25 lakh. This takes the overall outgo to around Rs 29 lakh for over a 10-year repayment tenure.
Here are a few of the crucial aspects that must be considered for a home loan –
∙ Property on which loan is provided is considered as collateral or security by lending companies.
∙ Property can be residential or commercial.
∙ In the case if the borrower is unable to pay for the dues, the lender has completed the legal right to recoup the rest of the amount by auctioning the property you bought.
Stepwise guide to home loan application procedure –
Here’s the stepwise guide for the home loan application procedure that can assist you in starting your journey –
∙ Submit the loan application –
This is the initial step in the home loan application procedure. As per this step, you are expected to place in the application along with your basic info. Information needed at this step involves –
∙ Personal details like contact details, name, residential address etc.
∙ Income info like annual income
∙ Education details
∙ Employment/business details
∙ Property information like commercial or residential address etc.
∙ Estimated property cost in question
∙ Current means of funding the property
Information needed at this point might differ from one lender to another. Additionally, for the information submitted as part of the application procedure, you must attach documents to authenticate the details as part of the loan application. Home Loan Documents Required at this phase involve the listed –
∙ Income proof
∙ Identity proof
∙ Age proof
∙ Employment proof
∙ Address proof
∙ Property details
∙ Education proof
Make a payment of the processing charges –
Once you have placed the home loan application, it is crucial to pay for the loan’s processing charges. Again, processing charges might differ from one lender to another. Typically, processing charges for home loan differs from 0.25 per cent to 1 per cent of the home loan amount.
Processing charges refer to the amount that the lender collects to maintain your loan account. This amount might even involve the commission that is paid to the agent. To get a good deal, you can also negotiate with the lender on processing charges. In this case, if the lender is providing no processing charge, do compare the interest rate, duties and various other fees that are included, which make the loan more costly for you.
Discuss with the lender –
This is the phase where the document submitted must be verified by the bank, and a formal discussion is conducted between the customer and the lender. This generally takes 1 to 2 working days or even less if the provided documents are in the right order. There are few lenders who may want you to approach the branch for loan discussion and discussion of other terms and conditions. Few lenders are even more comfortable in discussing such details in person and even collecting additional info about you. However, there are certain digital lenders who do not ask you to visit the branch, and all the submissions can be made online.
The online procedure, along with an end-to-end doorstep visit, allows a hassle-free and comfortable experience for you.
Wait for the document verification –
It is necessary to understand that various customers apply for a home loan almost daily. To make the processing of the loan application faster, it is necessary to submit documentation in the right order. At this phase, the lender authenticates the submitted details.
Typically, the listed documents are authenticated by the lender –
∙ Residential details
∙ Employment details
∙ Employer credentials
∙ Workplace contact number
∙ Residence contact number
These details get authenticated to make sure that all contact details and numbers submitted by you are in the correct order.
Get the approval –
This is a crucial part of your home loan procedure. Here, in this stage lender either rejects or accepts the loan application. To approve your loan application, the lender performs a detailed check of the loan application on the listed parameters –
∙ Qualification and age of the applicant
∙ Applicant’s employment details and business details
∙ Applicant’s income details
∙ Potential to make loan repayment with the fixed interest
Depending upon the analysis of the home loan application on the factors mentioned above, lenders confirm the highest amount they can grant. There are a few conditions under which the lender puts a few conditions, which must be met by you before the disbursement of the loan.