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Home Loans India

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Home Loans in India

The last decade has seen a phenomenal increase in the home loan market in India. The Indian home loan market has grown at a whopping 40% over the past 4 years. Steadily rising income levels coupled with a low interest scenario have been responsible for making a home within easy reach of middle class households. Well, if you are considering going in for a house and want to know how to go about it, look no further.

Home Loans

If you have been plagued by tiresome landlords and had to suffer many house shifts, you would be considering buying a house of your own. You can avail of a home loan from a housing finance company. The home loan market is crowded with housing finance institutions as well as banks that offer competitive rates for the loan and services. Major players in the market include HDFC, LIC, ICICI and nationalized banks. These housing loan companies offer many varied products to suit different consumers.

You are required to disburse this loan over a period of 10, 15 or even 20 years. The repayment in made in the form of EMI (Equated monthly installment). This is calculated on the basis of the rate of interest applicable on the loan and its tenure. You can save on rents and instead repay a home loan - The house is yours after all! The tax sops offered to the loan applicant is yet another boost to the home loan sector in India. It effectively reduces the cost of borrowing on interest and capital.

Home Loan Application Procedure
  1. The first step is to arm yourself with enough information on different home loan products. Compare offers on the basis of loan amounts they are willing to sanction, the interest rates, processing charges as well as specific clauses if any. You need a pre-approval letter so that you get a clear idea as to how much you can borrow and this will help in identifying and zeroing on a suitable property or apartment.

  2. The loan applicant has to submit the loan application form along with credit documents, photographs and a cheque for loan processing fees.

  3. The repayment capacity of the loan applicant is perused.

  4. The loan is then sanctioned and an offer letter is issued to the customer. The customer receives notification about the loan amount sanctioned, interest rate, loan duration and the mode of repayment.

  5. The loan applicant is then required to submit the legal documents pertaining to the property. These property documents will be kept with the home loan finance company till you repay the loan in full.

  6. The housing finance company will then conduct a legal check on the property so as to ensure that is free from any encumbrances and subscribing to guidelines. A surveyor will visit the site to verify the technical specifications.

  7. Then the loan is disbursed to the loan applicant. If the house is still under construction, the loan amount is disbursed on the basis of the stage of construction. Once the complete loan is disbursed, the EMI (Equated monthly installments) have to be made.

Most home loan financing companies would require the following documents to process a home loan application.

Home Loan Application for Salaried Employees:
  • Latest salary slip with all deductions

  • Proof of age

  • Proof of residence

Home Loan Application for Self employed persons:
  • Certified computation of income for past two years

  • Certified Profit and Loss Account and Balance Sheet

  • Proof of age

  • Proof of residence

Home Loans