Check out Home Loan Disbursement Process

Home Loan Disbursement Process

Check out Home Loan Disbursement Stages

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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.

Home Loan Disbursement Process

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.

Documents Required for Home Loan Disbursement Process

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

Identity Documents

  • Passport

  • Driving license

  • Aadhaar card

  • Voter ID card

 

 

Income Proof

  • Last 3 months salary slips

  • Form 16

  • Bank statements from the previous six months

  • ITR of previous two years

 

Income Proof

  • ITR for the previous two years

  • 6 months primary bank statement

  • Copy of firms service tax/GST/VAT returns (as applicable)

  • Advance tax payment slips (if any)

  • Balance sheet of previous six months

  • Assessment copy of profit and loss

 

Residence Proof

  • Voter ID card

  • Passport

  • Driving license

  • Aadhaar card

  • Utility bills

Residence Proof

  • Passport

  • Driving License

  • Aadhaar card

  • Voter ID card

  • Utility bills

 

Other Documents
  • Age proof

  • Office address 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

Other Documents

  • Age proof

  • Office address 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

Disbursement Stages

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. 

FAQs on Home Loan Disbursement Process

  • ✔️What is 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. 

  • ✔️What are the steps involved in a Home Loan disbursement process?

    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

  • ✔️How much time does it take to get the loan processed?

    After the approval, it may take around 7 days to 4 weeks. The time duration varies across the lender. 

  • ✔️What are the eligibility criteria to get a Home Loan?

    Your eligibility for acquiring a Home Loan is evaluated by multiple factors like your age, income, employment type, credit score, financial habits, etc.

  • ✔️What are the documents required for Home Loan disbursement?

    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

  • ✔️Is the processing fee for a Home Loan refundable?

    No, the processing charges are non-refundable.

  • ✔️What is the amount of down payment of a Home Loan?

    The down payment amount differs from one lender to another.