There has been an increase in the number of home loan applications in recent times. However, due to several reasons, many home loan applicants face rejection.
To avoid such situations, willing applicants should know the eligibility criteria and the documents required for a home loan before applying. This will ensure fast loan approval and a hassle-free borrowing experience.
What Are the Steps to Opt for a Home Loan in India?
You can apply for a home loan by following these simple steps:
Step 1: Visit the official website of your preferred lending institution and locate the home loan application form option.
Step 2: Feed in your full name, employment details, PIN code, income details and your desired home loan amount.
Step 3: Provide the OTP and complete the application process.
Following this, a representative from the lending institution will get in touch with you and take the application forward.
What Are the Documents Required for a Home Loan in India?
Here is a list of the documents that an individual must produce while applying for a home loan in India:
- Personal documents for KYC verification:
- Photo ID (Aadhaar Card, PAN Card, Voter ID, Driving Licence, etc.)
- Residential proof (utility bills, Ration Card, Passbook, etc.)
- Income details:
- Salary slips – 3 months (salaried applicants, salaried professional applicants)
- Proof of business (self-employed professional, non-professional applicants, etc)
- Qualification documents:
- Education certificates – MBBS and above (self-employed professionals – doctors)
- Valid COP (self-employed professionals – CAs), etc.
- Financial documents:
- Bank account statement – 6 months
- P&L statement (self-employed professional, non-professional applicants), etc.
Property related documents:
- Title deed
- Property tax receipts
- Allotment letter, etc.
A financial institution may ask for additional documents during the loan approval procedure, as and when required.
Features of a home loan
In this section, we are going to see some of the salient features of a housing loan:
- Competitive interest rates
Before applying for a home loan, customers must know the current home loan interest rates in order to plan their borrowings accordingly. When borrowers apply for a home loan at higher the rate of interest, the overall borrowing costs increases significantly.
- Home loan balance transfer facility
A balance transfer facility allows existing borrowers to transfer their outstanding home loan amount to a new financial institution. Applicants can opt for this facility if they find another lender offering a home loan at affordable terms, such as lower interest rates, longer repayment tenor, etc.
- Home loan tax benefits
Borrowers can enjoy tax benefits on the principal amount of a home loan under Section 80C of the Income Tax Act of 1961. Further, an individual can also claim tax exemptions on the interest paid for a housing loan under Section 24B, 80EE, 80EEA.
These are a few of the most beneficial features of applying for a home loan that make it a suitable choice for first-time home owners. Further, willing borrowers should check the features offered by their preferred lending institutions to reap maximum benefits from their borrowed credit.
Moreover, several financial institutions in India extend pre-approved offers for financial products, such as home loans, loans against property, and more. These pre-approved offers streamline the entire approval procedure and help fast disbursal of the loan amount. Customers can check their pre-approved offers by entering their names and phone number in the required section of their preferred lending partners.
To sum it up, intending borrowers should keep the documents required for a home loan handy while applying for this credit line. Further, after approval, one must pay the monthly instalments on time. Failing to pay even a single EMI on time can negatively affect the CIBIL score, reducing the chances of loan approvals in the long run.