Home Loan Disbursement Process Fee

If you are planning to purchase a new home, and getting ready to move into a space that you can call your own? Congratulations on taking the first step towards making your dream of being a homeowner come true. You may have already chosen the property you want to buy and even narrowed it down to the lender that you want to borrow the home loan from, like Aditya Birla Housing Finance Limited.

It is one of the leading HFCs (housing financial companies) in India that is known to offer a wide range of housing solutions. Also, they offer the loan with several benefits like attractive interest rates starting from 8.6% per annum, flexible EMI options, repayment tenure of up to 30 years, minimal documentation, simple online application process, and quick approval and disbursal.

Before you approach the lender and start the home loan application process, it is paramount to have a full understanding of the home loan disbursement process. If you are a first-time loan applicant, then this guide is just for you as we discuss how the home loan disbursement works and the three stages of loan disbursement.

How does the home loan disbursement process work?

The home loan disbursement process may vary based on the type of property you are purchasing. For example, if you are buying a ready-to-move home or a resale home that is fully constructed, the lender will disburse the full amount in a single lumpsum amount post sanction.

However, if you are planning to build your own home or have invested in an under-construction property, the lender will disburse the amount in smaller instalments after completion of each stage of construction.

The stages of home loan disbursement

There are three stages of home loan disbursement. These include –

Stage 1 – The application stage

The first step to getting the home loan amount disbursement from the lender is to submit your application form. Nowadays, as most of the leading lenders in India offer fully digital service, applying for the home loan has become easier than ever before. You can start the application online from the comfort of your home and complete it within few minutes.

Along with the application form, some of the lenders may require you to comply with the KYC (know your customer) formalities and submit a few basic documents. While the list of documents required by the lender may vary from one lender to another, generally, most lenders would require you to submit the following documents –

• Proof of identity (PAN/ Form 60)
• Proof residence (Officially Valid Documents such as Aadhaar, Passport, Voter ID, Driving Liscence)
• Proof of income or business
• Bank statement for last six months reflecting salary credit
• Pay slips for the last three months
• Copy of documents related to the property purchase
• ITR (Income Tax Returns), Profit and Loss account, audited balance sheet

Stage 2 – Home Loan Sanction

After you submit your home loan application along with the necessary documents, the lender will start processing your application. At this stage, they will verify all the details mentioned in your application form and do a thorough background check of your financial credentials and credit score as well as they will appoint a special team to do a technical verification of the property you want to purchase.

If they are satisfied with everything, the lender will then send you a home loan sanction letter, stating that your loan application is approved. The letter will also include important loan details like the sanctioned amount, the interest rate applicable, the repayment duration, the EMI for the loan, and other terms and conditions.

If your loan application is incomplete or some documents are missing, the lender will communicate it to you, and you must immediately furnish the same before you get your loan sanctioned.

After you receive the sanction letter, you must acknowledge it and give your approval to the lender by sending a copy of the sanction letter with your signature within a specific period. Generally, the sanction letter is valid only for two to six months. So, if you want to proceed with the loan process, you must give your approval within the validity period.

Stage 3 – Down payment and disbursement

After you send your approval to the lender, they will start the further process for disbursing the loan. At this stage, the lender will ask you to make the down payment and submit the receipt for it.

Down payment is the amount you pay from your pocket for the property purchase. Typically, most lenders in India approve loans of 70 to 80% of the property’s value. However, some lenders like Aditya Birla Housing Finance offer up to 90% of the property value as a home loan depending on the loan amount.

After you make the down payment and submit the document, the credit facility application form is processed, and the lender will disburse the full sanctioned amount in one go or the first instalment according to type of property disbursed

Once the amount is disbursed, your repayment period will begin immediately, and you must start paying the EMI every month until the end of the loan tenure or until you repay the full amount. In case of partial disbursement, you may have option to pay only the interest amount, and however after the full disbursement is made can you start paying the regular EMI.

As a home loan borrower, having a full understanding of the home loan process is critical so that you can make informed borrowing decisions. If you are a first-time borrower, Aditya Birla Housing Finance Limited can be your trusted partner in getting the funds you need to complete the home purchase. Apart from offering the best solution to suit your needs, the experts also guide you through the entire home loan process, from filling out the application form until you get the loan disbursement.