Every person has a dream of owning a house but with this increasing inflation, fulfiling this dream without any financing has become very difficult. This is the reason why people are opting for a Home Loan. A Home Loan allows you to buy or construct your dream house without any financial burden. This loan comes with flexible tenure and repayment options that you can choose as per your requirement.
Applying for this loan is the first move toward accomplishing your dream and getting your application approved and receiving a successful loan disbursement are the final steps. But do you know what phases are involved in a Home Loan disbursement process? If you are about to apply for this loan, you must be aware of this critical information.
Let’s have a look at the different levels involved in this procedure.
A Home Loan disbursement is the stage at which the lender approves and transfers the loan amount into the borrower's bank account. This is done in accordance with the financial institution’s terms and conditions. However, before approving any loan, experts do a thorough examination of your property and the provided details. If any information is missing or incorrect, your loan application may be rejected.
Below is the list of documents required for a successful Home Loan disbursement process.
Salaried Person |
Self-employed Person |
Application form along with passport size photographs |
Application form along with passport size photographs |
Identity Documents
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Identity Documents
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Income Proof
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Income Proof
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Residence Proof
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Residence Proof
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Other Documents
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Other Documents
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Here are the various Home Loan disbursement stages.
Step 1: Fill Out the Loan Application Form - The procedure starts with filling up the application form. If you are applying online, you may obtain the form from the lender's website, and if you are applying offline, you can obtain the form by visiting the institution's branch. You are required to provide your personal details, employment information, property details, etc., in the loan form. Fill out each detail carefully to avoid rejection.
Step 2: Submit the Supporting Documents - Documentation is the most essential aspect of securing any loan. Check the list of documents requested by the lender and submit it along with your application form. Any missing paperwork might create difficulties, leading your loan to take a longer time to get processed.
Step 3: Pay the Processing Fee - Following your submission, the lender may require you to pay a processing charge. The processing charge for a Home Loan is non-refundable and varies per lender. Lenders charge processing fees to start the loan process and maintain the applicant's loan account.
Step 4: Property Verification and Evaluation - Legal experts will examine your property details and evaluate the property site to determine the actual worth of the property based on its quality of construction and area. Following the completion of the verification procedure, you will get a confirmation in the form of a Home Loan disbursement sanction letter, which will validate your credit approval status.
Step 5: Make the Down Payment - Once you receive the approval, you will be informed about the date by the lender on which you are required to make the down payment. After payment, submit the payment receipt, known as ‘own contribution receipt’ to the financial institution. The down payment amount varies from lender to lender.
Step 6: Disbursement of the Loan - After completing all the steps and providing all necessary documents, the financial institution will process the loan amount. Depending on your credit score and the advancement of the property, the bank will either disburse the entire amount at once or in instalments. However, if your property is under construction, you will receive partial disbursement.
In partial disbursement, the loan amount is given in instalments to the borrower. It is mainly for an under-construction property. Under this payment method, the financial institution disburses the payment in accordance with the development of the building.
The disbursement process of a Home Loan includes following stages.
Fill out the loan application form
Submit the supporting documents
Pay the processing fee
Property evaluation and verification
Make the down payment
Disbursement of the loan
After the approval, it may take around 7 days to 4 weeks. The time duration varies across the lender.
Your eligibility for acquiring a Home Loan is evaluated by multiple factors like your age, income, employment type, credit score, financial habits, etc.
Below is the list of documents that you must have.
Identity proof
Residence proof
Age proof
Income proof
Investment details (if any)
Co-applicant’s identity proof
Co-applicant’ passport size photographs
Property documents
Estimate cost of construction
NOC from builder/society
Approved copy of building plan
Sanction letter
Encumbrance certificate
No, the processing charges are non-refundable.
The down payment amount differs from one lender to another.