Step By Step Home Loan Procedure

Home and shelter is a primary need of people, and owning a roof over your head is a major accomplishment. With the rising cost of living, the costs of buying a home have also gone up. To help individuals purchase a home, banks and financial institutions offer home loans to eligible people.

The home loan procedure is an extensive process for applicants. However, with the use introduction of the online application process, the home loan procedure has become relatively easy. People can now complete home loan applications from anywhere with a few clicks.

The complete process of home loan approval

To get the home loan approved, it is crucial to follow all the steps of the home loan application. The step-by-step guide to home loan application is as follows-

  • Submit the application

The first step to applying for a home loan is to know about the home loan criteria and fill out the home loan application. You can request a hard copy of the application form or access the online form from a bank’s website. The application should include your personal and property details as well as your income details. Submit the complete application form online or offline.

You can also ask the bank executives to help you with the application process. There will be some important documents and details that you will need to submit to the bank. The documents that are required under the home loan criteria are identity proof, proof of income or business and other official documents.

  • Processing fee

After completing the loan application and submitting the required documents, the applicant needs to pay the processing fee. The processing fee is a small amount that the borrowers need to pay to register with the bank as an applicant. 

The processing fee is paid to open and maintain the loan account of the applicant at the bank. Before paying the processing fee and committing to the process of the loan, shop around and compare the interest charged on the loan and the final amount you have to repay to the bank.

  • Discussion with the bank executives

Once the application is submitted for further processing, the bank sends executives to discuss the loan terms with the applicant. The discussion can either be held at your home or the bank branch office, or anywhere else. Banks generally send their executives to the residential space of the applicant to conduct the discussion. If the applicant applies online, the entire procedure becomes simple and hassle-free.

  • Get the papers verified

Once the loan executives have held the discussion with the applicant, they go ahead with the verification of the documents that are submitted. The papers and documents must be all recent and valid for the loan approval to be successful. The executives verify the property details, identity proof and proof of income along with other documents. In case some false information is found, the loan application might get rejected by the bank.

  • Get the sanction letter

The bank analyses the loan application and then approves the loan if the loan application criteria are met. During the approval process, the lending institution sends a sanction letter to the applicant. The sanction letter is the proof that your loan application is officially approved.

A sanction letter will have the details of the loan amount, the interest rate charged and other terms and conditions associated with the loan. The tenure of the loan and the monthly instalment amount to be paid are also mentioned in the sanction letter. 

Other important details of the loan agreement are also highlighted in the sanction letter. The applicant should read the sanction letter properly and note all the details mentioned in the letter to understand and remember the terms of the loan. 

  • Submit your property details for the inspection

Once the sanction letter is received, the final step for getting the loan amount is to submit the property details and documents related to the development of the construction site or the home the borrower wishes to buy. The bank will inspect the site and the progress made. Once the site inspection and technical review are done, the applicant and the bank authorities reach a final agreement and disburse the loan amount to the borrower’s bank account.

  • Approval

A loan approval process is the most important step of the procedure, and the applicant has to get the loan approved by the bank to get the funds. After the loan approval and document verification, the bank disburses the loan amount to the borrower’s account. 


The process of obtaining a home loan can seem daunting, but it is a manageable task if approached with accurate information. By following the step-by-step procedure of evaluating your financial position, selecting the right lender, choosing the appropriate home loan terms, completing the application process, and finally securing the loan, you can successfully achieve your dream of becoming a homeowner. 

It is important to research and compare options, understand the terms and conditions of the loan, and be diligent in providing all required documents and information to ensure a smooth and efficient home loan approval process.