The Covid-19 Pandemic brought with it the change of social distancing and taking all the offline processes online. Home has been the safeguard for all of us, keeping us away from the crowd. It is only natural that one wants to own his safe haven. Purchasing a home is one of the biggest and most important decisions in one’s life. Housing loan makes the dream come true to purchase or renovate your property. With home loan application process going online, it has proven to be a boon for those who want to safely work out of their comfort zones. Online home loan application is now possible.
Anil has been immensely benefitted with the banking process going online. Here’s how he got his home loan without any hassle. If you are looking for how to apply for home loan online, here’s all you need to know.
Step 1 – Anil decided on the property to be purchased
Anil did thorough research on the locality, neighborhood, facilities, pricing of the property he wanted to purchase. After deciding on the final price with the seller, he approached the bank.
Step 2 – Compare home loan offerings of banks
Each bank had several home loan products. They ranged from Regular Home Loan, Balance Transfer of Home Loan, to, loans specifically designed for NRIs, Salaried employees and Government employees. He was a government employee, hence opted for SBI Privilege Home Loan.
Step 3 – Calculate the down payments and loan amounts
Banks usually issue 80% of the intended purchase price for the property. Loan applicant, Anil, set aside 15% of the amount. This 15% is down payment which the loan applicant has to take care of.
Once he was sure on the amount of money he could pay as down payment, amount of money required from the bank as housing loan, he calculated the EMI to be paid. He used Home Loan Emi Calculator from Fincity online. Once he entered the loan amount, interest rate and tenure of the loan, the EMI was displayed. This gave him a fair idea as to how much he should set aside month-on-month apart from his fixed monthly expenses and emergency expenditure.
Step 4 – Contact the bank
Once Anil had done enough research and calculations on his own, he contacted SBI bank to find out the exact amount he was eligible to be loaned. He was careful in mentioning to the bank official to let him know the amount eligibility without having to check his credit score. For he knew, that each time a bank makes an enquiry to CIBIL to check his credit score, his score would go down. And when multiple banks make an entry in his CIBIL report, it would affect his credit score heavily. He had worked hard to maintain his credit score. He did not want this one small act to affect it. That too, right when he wanted to borrow a large sum of money from a bank.
Step 5 – Home Loan Application
Once he was satisfied hearing the sum of money the bank was willing to loan him, he filled up the home loan online application form. He was careful in filling out all the details to make sure there are no errors. This was to make sure his loan application passes smoothly without any issue. In case any information was found false or faulty, loan application would be rejected. Along with his loan application, he submitted all the documents requested as per the SBI Housing Loan Plan he opted for.
Step 6 – Payment of Processing Fee
Processing fee is the fee that the home loan applicant pays the bank in order to process his application. This is a non-refundable fee. Since Anil had a savings account with SBI, they auto-deducted the charge from his SB account. He had heard from his friends that some banks charged other fee, so he enquired about the charges and got to know that there was no legal charges or pre-payment penalties. A few of the banks were charging valuation charges and application fee along with the processing fee. Anil was thankful that he was not bound to pay any of that.
Step 7 – Backend verification process
Every detail that Anil had entered into his housing loan application form was scruitized by the bank for authenticity. All the submitted documents along with the loan application were scrutinized. Bank did not find any documents misleading or false. The information given by Anil on the loan application form, verbally and in the documents matched. This made it easy for the bank officials to verify facts and trust him.
Step 8 – Credit appraisal
Bank gauged his repayment capacity. This was based on factors like his yearly income, fixed monthly take-home salary, age, experience, nature of business or employer.
Step 9 – Offer letter
Once the bank was satisfied with his documents and financial history, the bank officials sanctioned Anil’s house loan. They sent him an offer letter which had details like loan amount, tenure, rate of interest, processing fee and repayment options. Since Anil had a good credit standing, he negotiated further to reduce the rate of interest and got the best deal.
Step 10 – Loan sanctioned and amount disbursed
The loan amount was disbursed in full to Anil’s bank account. This process usually took about a fortnight when done offline, but with online systems in place, it was done within a week.
Now that you know the home loan application process and how Anil did it online, you’re all set to go. You can read all about the home loan plans offered by SBI and HDFC here. If you have any questions, do as us in the comments below.