The process of a new home loan

Updated on May 18, 20183 mins read

Most of us hope to own a home some day. Savings up to pay the entire value could take years. But with the help of a home loan, you can achieve this goal much earlier.

Let’s take a look at steps involved in applying for a home loan in India.

Step 1

Personal discussion

The first step is to meet the bank/HFC of your choice. At this meeting you will find out important aspects like:

Step 2

The next step is to gather all documents required for the home loan application. The basic set of documents required are:

  • Customer details or KYC documents
  • Income documents
  • Property documents

Read our post on document checklist to know more.

Step 3

Submit documents and processing fees

It will take you some time to gather all the documents for home loan. Once all the documents are ready, you have to submit the documents, home loan application and a cheque for the processing fees. This fees could be a percentage of the loan value or a fixed amount.

Step 4

Eligibility check

The bank will now conduct an extensive eligibility assessment and verification. Based on your income and liabilities, the bank will find out how much loan you are eligible for. Your personal details, address, employment details etc will be verified. There will also be a check on how well you have repaid your loans in the past. Based on the findings, the bank will now issue a sanction letter with loan value, terms and conditions and interest rate.

Step 5

Legal and valuation check

Once the loan is sanctioned, the next step is for your property and documents to be verified. You will need to pay a legal and valuation fees at this point. Banks appoint external legal advisor and valuators for this task.
Step 6

Agreement signing

Once the legal and valuation checks are through, you can now sign the loan agreement with the bank. This agreement needs to be registered by paying a stamp duty. Stamp duty would be between 0.1%-0.3% of the loan value.

Step 7


This is the final step. The bank will now disburse the loan amount as a cheque to you. Along with the down payment amount you can submit the disbursement cheque to the builder and make the final purchase

Few things to keep in mind in the entire process:

  • There are many smaller charges that you will incur when you apply for home loan

           Here are 14 such overhead costs.

  • There are several reasons why your home loan application may be rejected
  • Documents for self employed & professionals will different from that of salaried individuals.
  • Stamp duty varies from state to state in India
  • Some banks waive off processing charges. Make sure you bring this up during your personal meeting.

There are two ways to carry out a home loan process – personally or with the help of an advisor.

It goes without saying, if you have an experienced advisor you will save a lot of time and effort.

An advisor can help you understand all the documents required. He is able to point additional documents that the bank may ask for because of some reason. The advisor will also be able to tell at a glance if your application may be rejected due to some reason. You can then prepare better and apply for the loan. The chances of such a loan application being accepted are high.

Now that you know how to apply for a home loan, don’t wait. Grab your dream home now!


Suma Ganesh

Suma Ganesh

Suma is an MBA in Finance and Marketing from ICFAI, Bangalore. She worked as an investment advisor to retail and high networth clients for nearly 7 years at Allegro Capital Advisors Pvt Ltd. This gave her a first hand understanding of the needs of an individual customer. With this edge, she moved on to Adi FinShiksha Pvt Ltd, where she trained financial advisors to manage their clients' investments and financial needs. With deep understanding of customers and their advisors, Suma then moved on to writing content in the space of personal finance. she is currently working as part of the content creation team at SwitchME, addressing the needs of home buyers and home loan borrowers.

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