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Complete Guide On Getting Housing Loan Easily In India


Buying a house is always a dream, whether it’s your first or fifth. Most people who buy homes today get loans to pay for their purchases. Consider getting a housing loan to buy your dream home. Since housing loan interest rates are getting cheaper, almost every big bank offers a wide range of housing loans with attractive perks. The most obvious first step is to apply for a mortgage. You may have a lot of worries and questions about getting housing loans. You can be sure that this detailed guide will answer all your questions about applying for a housing loan.

How does an Indian housing loan work?

The bank or NBFC pays the owner or builder the housing loan amount. The borrower is expected to pay back the loan amount plus interest over the chosen period.

For example, if you borrow Rs. 25 lakh for 10 years at an interest rate of 9.5% per year, your EMI will be Rs. 32,418. The calculation also proves that the loan will cost Rs. 14 lakh in interest on top of the Rs. 25 lakh principal, which brings the total cost over 10 years to Rs. 39 lakh.

Here are a few important things to remember about housing loans:

  1. The lending company takes the property used as collateral for the loan.
  2. The property can be used for either business or living.
  3. If the borrower can’t repay the loan, the lender has the legal right to sell the property to get the rest of the money.

A step-by-step guide to getting housing loans

Housing Loan Application

This is the first step of the housing loan process. In this step, you fill out the loan application with your basic information. At this point, you’ll need the following information:

  • Information about a person, like their name, phone number, and where they live.
  • Information about earnings, including annual earnings.
  • Details about schooling, careers, and jobs.
  • Details about the property, like where it is and what it is used for.
  • This is a rough estimate of how much the property will likely cost.

At this point, lenders might need different kinds of information. The application must include proof that the facts given are true. At this point, you’ll need the following documents for your housing loan:

  • Identity proof
  • Age proof
  • Income proof
  • Address proof
  • Education proof
  • Employment proof
  • Property details

Pay the processing fee

Your bank will charge you a non-refundable fee for processing the loan. The processing fee at a typical bank can be anywhere from 0.5% to 2% of the loan amount. GST is an extra 18% added to the price (Goods and Services Tax). Financial institutions use this amount to start and keep the housing loan process going.

To attract more customers, some banks have stopped charging loan processing fees. You can get an advantage by negotiating and pursuing. Some banks might be willing to do without processing fees, but others would not.

Discuss with the lender

At this point, the bank has checked the submitted documents, and the lender and the customer have a formal conversation. If the documentation is in order, it usually takes one to two working days or less.

Some lenders want you to come into the branch to discuss the loan, the terms, and other details. Some lenders feel more at ease talking to the claimant in person about these details and getting more information about them. On the other hand, modern financial institutions don’t require you to go to the branch for anything. The online process and door-to-door service from start to finish make things easy and pleasant for everyone.

Wait for the verification

It’s important to know that many people apply for housing loans daily. To speed up the time it takes to process your application, make sure your documentation is in order. At this point, the lender checks the information that the applicant provided.

Most of the time, the lender checks the following documents:

  • Residential address
  • Employment details
  • Credentials of the employer
  • Residence phone number
  • Workplace phone number

These details are checked to ensure that the applicant gives the right phone numbers and other information.

Housing Loan Offer Letter

The offer letter written by the bank includes the following:

  • Approved amount
  • The interest rate that applies to the principal amount
  • Fixed or changed interest rate
  • Loan tenure
  • Method of payment
  • Special plan (if applicable)
  • Terms and conditions of the loan

If you agree with the offer letter, you must send the bank a signed copy of your acceptance. An acceptance copy is a copy of the offer letter that the bank puts on record. The administrative fees charged by the bank should be paid off.

Property Verification

The bank will inspect the property before making the loan. You must give the title deed, the no objection certificate, and other original papers. The property’s title will be checked to ensure there are no problems.

Banks also do technical valuations of properties. A property that is still being built will be judged by the bank based on its location, stage, quality, and progress.

Before selling or reselling a property, the bank looks at its age, who owns it, quality of construction, upkeep, location, and legal status. Property evaluators who work for the bank decide how much of a loan to give based on established rules.

The property backs up your housing loan. When the loan is paid off, your papers will be returned to you.

Disbursal of Housing Loans

After all the above requirements have been met, the registration process for the housing loan can begin.

The bank’s attorney must approve the final document before printing it on stamp paper. After this, you must sign the housing loan agreement and give post-dated checks for the agreed-upon term.

After you sign the loan agreement, the process of getting your housing loan money will start, and they will inform you about the housing loan balance transfer interest rate. Your bank will give you the loan amount based on how you agreed to get it (all at once or in stages).


All banks and credit unions have the same process for getting a housing loan. But the process might be different based on the lender’s rules and the borrower’s past. Before applying for a housing loan, you should do research and find a trustworthy lender. Once the loan is approved, you’ll start paying interest from that day on, so don’t wait to send in any missing paperwork or finish any other formalities on your end. If you want to know more about how housing loans are sanctioned, visit Piramal Finance.