A Detailed Guide on Opting for a Home Loan in India

Your house gives you a sense of security, achievement and pride. It is also an indicator of the status quo in Indian society. This is why you might want to buy your own home as early as possible. If you have enough funds for it and can spend your savings on purchasing a house without compromising on other goals, there is nothing like that. But if not, there is no need to get disheartened. For, you can still fulfil your goals through a home loan.

A home loan can help you buy your dream home without draining your savings. However, if it’s your first time, you could be clueless and overwhelmed with the required process. To make things easier for you, here is a detailed guide on availing a home loan in India.

What is a home loan?

A home loan is a secured loan that helps borrowers buy their dream home. Whenever you wish to purchase a ready-to-move house, under-construction house or build a house on a plot of land, you can avail a home loan and fund majority of the cost. You can repay the loan amount in equal instalments called an EMI for the selected tenure. To get a home loan, you need to pay an upfront cost called a down payment, which is usually 15%-20% of the entire house purchase. According to the down payment amount, the lender determines the maximum amount of loan you can avail. It is advisable to use a home loan EMI calculator before applying to ensure that you do not borrow more than you can repay.

How to get a home loan in India?

  • Fill out the application form

The first step is to visit the lender’s website and fill out the application form. You will need to fill in your basic information like personal details, income details, property details like its cost, employment details, etc. You would also be required to submit necessary documents as evidential proof of the information you have furnished in the form. Ensure to fill in the information accurately and submit updated documents.

  • Pay the processing fee

You will need to pay a non-refundable processing fee that can be 0.5% to 2% of the loan amount. You can negotiate the charges or ask for a waiver of this fee from the lender.

  • Home loan offer letter

Once your application is scrutinised and verified, the lender would evaluate your repayment capacity. Once that is done, you would get the loan offer letter which will contain the interest rate, sanctioned amount, tenure, etc. You will need to accept and send a signed copy to the lender.


  • Home loan disbursal

The lender would then verify your property and evaluate its value. Once they are satisfied, you will get the loan agreement. On signing the agreement, your home loan disbursal process will start.

Now, when you know everything about home loans and the process followed, you can purchase your house and live a life of dignity and pride. However, to ensure that your application is approved, use a home loan eligibility calculator and check your affordability before applying. All the best!