Step 1: Understand Your Eligibility
Before you approach a lender, estimate how much loan you can get. Lenders usually assess:
- Age: typically 21–65 years
- Income: monthly/annual income and stability
- Employment type: salaried, self-employed, or business owner
- Credit score: 750+ is considered a strong score
- Existing debts: lower liabilities help increase eligibility
Tip: Use an online Home Loan Eligibility Calculator to get a quick estimate.
Step 2: Compare Lenders and Interest Rates
Different banks and NBFCs offer varied interest rates, processing fees, and loan features. Compare:
- Fixed vs floating interest rates
- Processing fees and prepayment charges
- Special schemes for women, government employees, or first-time buyers
Step 3: Prepare the Required Documents
Having documents ready speeds up approval. Typical documents include:
For Salaried Individuals
- Identity proof (Aadhaar, PAN, Passport)
- Address proof (utility bills, voter ID)
- Salary slips (last 3–6 months)
- Bank statements (last 6 months)
- Form 16 / ITR (last 2 years)
- Property documents (agreement, sale deed, NOC)
For Self-Employed Applicants
- Business registration / incorporation documents
- ITR with computation (last 3 years)
- Bank statements (last 12 months)
- GST returns (if applicable)
Step 4: Submit the Loan Application
You can apply online through the lender’s website or visit a branch to apply offline. Key steps:
- Fill the application with personal, financial, and property details
- Upload or submit the required documents
- Pay the processing fee (if applicable)
Step 5: Verification and Approval
After submission, the lender performs:
- Credit score and repayment history check
- Employment and income verification
- Legal and technical verification of the property
If all checks are satisfactory, the lender issues a sanction letter stating the sanctioned amount, tenure, and rate.
Step 6: Loan Disbursement
After you accept the sanction, sign the loan agreement and complete KYC. The lender disburses the loan (usually to the seller or builder). You start EMI payments as per the repayment schedule.
Tips to Improve Your Chances of Approval
- Maintain a good credit score (750+)
- Pay off or reduce high-interest debts
- Save for a higher down payment (20–30% helps)
- Consider a co-applicant to increase eligibility and lower EMI burden
- Choose a longer tenure if monthly affordability is a concern
Common Home Loan Terms (Quick Glossary)
- EMI: Equated Monthly Instalment
- Processing Fee: One-time fee charged by lender
- Prepayment: Paying part or full loan before the schedule
- Loan-to-Value (LTV): Ratio of loan amount to property value
