According to an article published in the Deccan Chronicle, India holds the 51st rank in terms of capital appreciation of housing prices, increasing 2.1% in rates during the October to December quarter of 2021. In simpler terms, this implies that individuals looking to own a home will have to arrange for more funds than before.

Complete Guide to the Home Loan Process

Opting for a housing loan can undoubtedly prove to be helpful for all such individuals. But to procure this credit instrument seamlessly, one must be aware of the entire home loan procedure.

How to apply for a housing loan?

To apply for a home loan, potential applicants must follow these steps after visiting the concerned lending institution’s official website:

  1. Step: To open the online home loan application form, select ‘Apply Online.
  2. Step: Input all necessary basic personal details.
  3. Step: Complete the verification procedure by using the OTP received on the mobile number.
  4. Step: Select a suitable housing loan amount, and tenor, and fill up the property, employment, financial, and personal details.

Once applicants complete this application form, representatives from the lending institution will get in touch for further steps of the home loan procedure.

Documents required for the housing loan procedure

A representative from the lending institution gets in touch with the borrower to collect all necessary documents for the home loan procedure. These include the following:

  • KYC documents – Aadhaar Card, Voter ID Card, Passport, Driving License (anyone)
  • Employee ID card
  • Salary slips of the past few months (as specified by the lender) or Form 16
  • Documents of the property that is to be mortgaged
  • Bank account statements for the previous few months (as specified by the financial institution)
  • Documents of proof of business of a certain time frame as mentioned by the lending institution (applicable for self-employed individuals or businessmen)

Individuals must note that this list of documents is indicative. The financial institutions can ask for additional documents during loan processing.

Eligibility criteria for a housing loan

Listed below are the eligibility criteria that all potential applicants must fulfill to procure a home loan in India:

  • Must be a resident of India
  • Age should be between 23 years to 70 years
  • Should have a minimum work experience of three years
  • Must be an employee having a stable salaried income source (for salaried individuals)
  • Should be a self-employed individual having a business continuity of above five years with the present enterprise (for businessmen or self-employed individuals)

Prospective home loan borrowers must note that the above eligibility parameters for a housing loan are indicative. Apart from these, the lending institutions may lay down additional requirements. Also, individuals must keep in mind all the factors that can affect home loan eligibility.

Individuals willing to opt for a housing loan must use a housing loan EMI calculator prior to applying. This is a user-friendly tool that is readily available on the website of all financial institutions, and individuals can easily calculate home loan EMI on it. This can be illustrated via an example.

Suppose an individual enters the housing loan amount as Rs.25 lakh, interest rate as 7.5%, and loan tenor as 20 years, the calculator will display the loan EMI as Rs.20, 140. The total interest payable will be Rs.23, 33,559 and the total payment (interest + principal) will be Rs.48, 33,559. For this scenario, the home loan EMI schedule will look like this:

For 2022 – the total payment (principal + interest) will be Rs.2, 01,398, and the remaining balance will stand at Rs.24, 53,561.

By 2042 – the total payment that must be done will be Rs.40, 280, and there will be no remaining balance implying that the loan will be paid completely.

There are several benefits of calculating EMIs before taking a home loan. Like, being aware of the payable EMIs beforehand helps in timely home loan repayment. Apart from this tool, individuals must ensure to opt for a reputed financial institution to apply for this credit instrument. This will help them benefit from several offers that these renowned lenders extend.

For instance, choosing a renowned financial institution will allow borrowers to benefit from several pre-approved offers on secured and unsecured financial products. These offers help simplify and accelerate the lending process. Individuals can check their pre-approved offers by providing a few details, such as their name and contact number.

Thus individuals must keep in mind all the details mentioned above regarding the home loan procedure.


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