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Numerous housing finance companies, public banks, and private banks offer housing loans, which allow you to borrow money to buy a home and pay it back in monthly instalments. However, prior to applying for a home loan, it is important to understand the procedures involved in getting the loan.

Process of Getting a Home Loan

  • Step 1 - Fill in the Application Form

Completing the application form is the first step in the process of obtaining a home loan. You need to fill in your personal information and details about your earnings, employment, current assets, property, schooling, and so on in the form.

  • Step 2 - Attach the Required Documents

After you've completed the home loan application form, attach the supporting documents listed below:

  1. Identity Proof: PAN card, Aadhaar card, passport, driving license, etc.

  2. Address Proof: Aadhaar card, passport, driving license, utility bills, etc.

  3. Age Proof: Birth certificate, 10th certificate, Aadhaar card, PAN card, passport, etc.

  4. Evidence of academic qualifications

  5. Income Proof: Bank statements, ITR, etc.

  6. Business Proof: Balance sheet, profit & loss statements, business license, etc.

  7. Property Documents: Approved copy of the building plan, a letter of consent from the society/builder, and an estimate of the cost of construction

  • Step 3 - Pay the Processing Fees

The lender may request a processing fee after you submit the home loan application form with the supporting documents. The processing fee for a home loan is non-refundable and varies from one lender to another. It typically ranges between 0.25% and 1.0% of the loan amount requested. 

  • Step 4 - Document Verification

The lender will verify the submitted documents and other details. Bank representatives may even visit your home or contact your employer to validate the information provided in your home loan application. Your lender will also look at your credit score and credit report from one or more credit bureaus during the checks. 

  • Step 5 - Sanction Letter: 

You will receive a sanction letter after passing the document verification process, which will typically include the following information:

  1. Sanctioned loan amount

  2. Applicable interest rate

  3. Interest rate type – fixed or variable

  4. Loan term

  5. Repayment method

  6. Special plan (if applicable)

  7. Your home loan's terms and conditions

  8. Your mortgage's policies

  9. Other details, such as your home loan policies, may also be included in the letter

 After receiving the letter, sign and return the acceptance copy to the lender. The acceptance copy is a duplicate of the sanction letter kept by lending institutions for record-keeping.

  • Step 6 - Verification of the Property and a Legal Check: 

The bank will verify the property collateralised before disbursing the loan. Original copies of the property title, NOC, encumbrance certificate, and any other documents requested by your lender will be required. The property will be subjected to a legal review to ensure the title is clear and that no disputes exist. 


The bank will also conduct a specialised valuation of your property. In the scenario of an under-construction property, the bank will examine the property's location, construction stage, quality, and progress, among other things. If the property is ready to sell or resell, the bank considers its age, ownership, construction quality, maintenance, location, and legal clearances.

  • Step 7 - Disbursement of the Home Loan: 

You will receive the final agreement from the lender once all of the above steps have been completed successfully. Subsequently, the home loan will be disbursed according to the terms that were mutually agreed upon.

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Now that you have understood the processes involved in the application of a home loan, it is time for you to start your borrowing journey. You can choose from a range of leading home loan providers on Bajaj Markets and benefit from low interest rates and extensive repayment tenures.


What is full disbursement?

A full disbursement occurs when the bank transfers the entire amount at once. The loan disbursement is complete in the case of ready/resale property. This means that the lender provides complete payment by cheque.

What is part disbursement?

When a property is under construction, the loan is usually paid in instalments, which is known as partial or part disbursement. The lender may not start the EMI right away if the loan is only partially disbursed. 

What is the prepayment of a home loan?

Home loan prepayment is a facility that allows you to repay your loan (in part or in full) before the end of your loan term if you have excess funds. If you opt to repay the entire outstanding amount, you can foreclose the loan. Meanwhile, if you choose to make a partial payment in advance, you have two choices: 

  • Reduce the EMI amount while maintaining the same tenure

  • Reduce the term while maintaining the same EMI

What is a sanction letter for a home loan?

A home loan sanction letter is an initial approval letter signed by a person of authority for a home loan applicant. The letter is issued following the verification of details such as credit history, income stability, repayment ability, and documents.

What is the processing fee for a home loan?

You must pay a fee to banks or NBFCs for them to process your home loan application. It is a one-time fee that is usually paid proactively. Some banks may refer to it as an administrative fee. The processing fee is usually charged only after your application has been approved

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