Home Loan Process in India

I recently went through the process of taking a home loan from a private bank in India. Generally, the process is simple and straightforward, however, there are some important points in each stage of the process that will help any borrower going through this process. In this article, I will describe the home loan process followed by Indian banks along with some tips to help you make the process as smooth as possible.

Type of Bank

In India, you can take a home loan from a public or a private bank or an NBFC (Non-banking Financial Company). Many people prefer to go with public banks such as SBI or NBFCs such as LIC. It doesn’t matter who you go with. In general, all of them offer very competitive rates and decent service. However, it would be preferable to go only with large entities.

Salaried Vs Self-Employed

All home loan providers provide loans to both salaried as well as self-employed. However, self-employed people are generally offered a slightly higher interest rate compared to salaried people due to the perceived higher risk of default from the self-employed. Self-employed borrowers are also required to produce many more documents compared to the salaried borrowers (We’ve described these documents later in the article.

Pre-approved Projects

You can take a home loan for an under-construction project, a read-to-move apartment, or even an independent house. While taking a loan for an independent house, it’s okay to approach any bank of your choice. However, if you are purchasing an apartment, it really makes things easy to go with a bank that has the apartment project pre-approved. Each builder when they start a project get their project pre-approved by a number of banks. As a part of the pre-approval, a lot of legal and regulatory paperwork is completed. So, when you take loan for a pre-approved project, the legal verification and the site-level technical verification is already done and saves you time.

The Process

This content is for paid members only.

Join our membership for lifelong unlimited access to all our data science learning content and resources.