Home Loan Sanction Procedure

Purchasing a home is among the most noteworthy choices a person makes in their lifetime. Many people can now afford to buy a home thanks to the introduction of affordable home loans. 

In India and throughout the world, taking out a home loan to cover a portion of the required funds is fairly common because buying a home is an expensive endeavor. 

Before attempting to get a loan approved, it is advisable to have a complete understanding of the procedures involved in order to prevent needless misunderstandings during the loan application process. The complete loan sanctioning procedure is covered in detail in this post.

What Are Home Loan Process Steps?

Home loan approval process follows several steps. To apply for a Home Loan you need to:

Step 1: Check your Eligibility

Verify your eligibility for any loan before applying for one. Financial organizations establish criteria for evaluating and identifying risk-free prospects among potential borrowers. You must provide your name and employment information. 

Enter your mobile number and a one-time password (OTP) to verify it. Select the amount you wish to borrow. Enter more information such as your date of birth, employment information, and income. Next, select "Check Eligibility." You will hear back from us right away. 

Step 2: Fill Out and submit the Application Form

Making an application for a home loan is the first step. Complete the application form first. 

Go to the lender's website or download its app, then click "Apply." You must complete the application form by providing some basic details such as your home address, yearly income, educational background, employment history, and other personal information.

Attach scanned copies of your documents after this is finished, such as your salary slips, bank statements, Aadhaar, PAN (Permanent Account Number), identity proof, and address proof.

Step 3: Submit the documents

You will need to provide the required paperwork for the next step, which includes bank statements, property records, identification and address verification, and proof of income.

Borrowers need to submit the following documents for a Home Loan:

Step 4: Document Verification

It is crucial that you understand that numerous customers submit applications for home loans on a daily basis. Getting all of your paperwork in order will help expedite the processing of your application. Depending on the information you provide, the lender will verify the documents.

The lender verifies the following information. 

These particulars are checked to make sure the applicant provided all the correct contact information and details.

Step 5: Get the loan Approved

After reviewing your application, the lender will start the approval process. The lender thoroughly reviews the application based on the following criteria before approving the loan:

The Bank will sanction the loan amount and provide a Sanction Letter if your application is accepted. The loan amount, interest rate, and other relevant details will be included in the sanction letter.

Step 6: Sign agreements

The deal must be finalized and registered once all technical checks have been completed and the lender is satisfied with the property used as collateral for the loan.

The lender's lawyer is supposed to complete the documentation and obtain the necessary stamps.

It's time for both parties to sign the documents after everything is in order. The applicant is required to submit postdated checks for the duration that both parties have agreed upon when signing and submitting the paperwork.

Step 7: Get the loan disbursed

The lender will pay the builder or seller of the property the loan amount after confirming the documentation. 

The bank or NBFC pays the owner or builder directly with the amount borrowed from the home loan. Over the chosen tenure, the borrower is required to repay the loan balance in monthly equal installments (EMIs) plus interest.

How Home Loan Works?

The owner or builder receives direct payment from the bank or NBFC for the amount borrowed on their home loan. During the chosen tenure, the borrower will be required to repay the loan balance in monthly installments, plus interest in addition to the principal.

The following are some crucial details about house loans to be aware of:

1. The loan provider takes ownership of the property as collateral for the loan.

2. The property used as collateral can be commercial or residential.

3. The lender is legally entitled to recover the outstanding balance by selling the relevant property at auction if the borrower is unable to make the payments.

Points To Remember Before Applying For A Home Loan

When thinking about getting a home loan, keep the following points in mind:

Eligibility Requirements: To lessen the likelihood of being turned down, make sure your eligibility corresponds with the lenders' requirements.

Property Profile: The profile of the property you have chosen is an additional crucial factor to take into account. To be eligible to apply for a loan for the property, it must meet the lending parameters and the lender's risk assessment.

Applicable Tenor: A loan for real estate typically has a maximum 40-year payback period. But before choosing your tenor, consider your options carefully because it will directly affect your potential outflow of interest.


Buying a property can be quite the burden if you don't have outside funding. If you're thinking about buying a property, you might also think about getting a home loan to help with the down payment.

With the help of a housing loan, you can obtain sizable funding to support the purchase of the desired residential property and repay the amount over a predetermined length of time at an agreed-upon rate of interest.

Home Loan Sanction Procedure - Related FAQs

Yes, a low credit score can significantly impact your home loan sanction process. Lenders often use credit scores as an indicator of an individual's creditworthiness. A low credit score might result in either rejection of the loan application or approval with higher interest rates and stricter terms. 

After the home loan is sanctioned:

  • The borrower reviews and signs the loan agreement.
  • The lender disburses the loan amount as per the agreed terms.
  • Borrowers should fulfill any additional requirements specified by the lender.
  • Regular EMI payments start

The time taken for a home loan sanction varies. Typically, it can range from a few days to a few weeks. The duration depends on factors such as the lender's internal processes, the procedure of document submission, property evaluation, and verification.

The documents needed for a home loan sanction usually include:

  • Identity proof (such as Aadhar Card, Passport, PAN Card)
  • Address proof (like Utility Bills, Rent Agreement)
  • Income proof (Salary Slips, Income Tax Returns)
  • Property-related documents (Sale Deed, Title Deed)
  • Bank statements
  • Any other specific documents required by the lender

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