Your Guide to Home Loan Sanctioning and Disbursement Processes

Posted by Shreekant Rao on February 27th, 2017

A Home Loan is a type of financing availed to fund the impending purchase of a residence. While you may know that taking a Home Loan is sometimes a lengthy affair, you also need to know the basic factors that come together before a loan is sanctioned and disbursed. Below is a brief explanation of the process.

The Home Loan sanctioning process in India can be tricky for first-timers to navigate, especially since lending agencies have certain criteria that you need to meet.

Documentation

The first thing that lenders look into is proper documentation. Provide proofs of your identity and address, bank statements, copies of your PAN card, and your home purchase agreement.

Credential Check

Lending agencies will also run a background check to verify whether you have provided accurate personal information. So make sure all your credentials are in order before you apply for a loan.

One-on-One Interview

Your lender will hold a personal meeting with you to get a better understanding of why you’ve applied for a loan. They will also need to know about your income, monthly expenses, age, and job stability, before sanctioning a loan.

There are also occurrences where lenders use an online application form to speed up the process.

Once you’ve successfully made your way through all the above processes, you can move on to the actual disbursement. Here’s how the Home Loan disbursement process in India works.

The Paperwork

You will receive documents from your lender that you need to sign and submit. They will also require certain property documents from your end.

The Down Payment

Before you get the loan amount, you will have to pay about 20% of the overall cost of the house as down payment. This may vary from lender to lender as well as your individual profile.

Legal Checks

The lender will also ask for a legal assessment of the property documents that you have provided, such as the NOC and Title Deed.

The Time Frame for Getting a Loan for Home Sanctioned

The Home Loan disbursement schedule will vary from lender to lender. Once all your documents are in place and verification is completed, the loan amount will be disbursed to you. The Home Loan disbursement time depends on how quickly the loan process takes place. Make sure to talk to your lender about the time each step will take so that you can have peace of mind. How Much Can Be Sanctioned?

The Home Loan sanction limit will be set by your lender based on a combination of factors, such as your age, income, professional qualifications, job stability, and repayment capability. They will also check for any outstanding payments you have on your previous loans, your credit score, and your repayment history. Keep in mind that the Home Loan sanction amount may sometimes be lower than what you have requested. Once the sanction process is done, you will receive a letter from your lender. This Home Loan sanction letter validity lasts for around six months. This letter does not mean that you receive finance right away but serves as proof that you are eligible for a loan. In case you are looking for a Home Loan with super-low interest rates.

The fact that a Home Loan is a huge responsibility can’t be emphasized enough, which is why you need to acquaint yourself with each and every process that leads to final loan disbursement.

[Source: https://blog.bajajfinserv.in/your-guide-to-home-loan-sanctioning-and-disbursement-processes/]