Loans

Before applying know how sanctioning and disbursement of home loans differ

Home loan, sanctioning , disbursement , Loan application, process, eligibility
Written by Publishing Team

If you want to get a loan to buy a residential property, there is a simple process that banks and other lending institutions follow before handing over the loan amount to you.

By V Swaminathan

Finding a home that you can finally call your home takes time. Once completed, if you want to take out a loan to purchase a residential property, there is a simple process that banks and other lending institutions follow before handing over the loan amount. The process begins with an application for a housing loan, followed by approval of the loan and finally disbursement. Below is a summary of the process leading to housing loan penalties and disbursement.

loan application process

Initially, the loan applicant must first submit the application to the bank and then the lender decides whether to accept the loan or not. After conducting a background check, as well as a thorough examination of the documents, the bank then sends a notification of approval to the applicant for the loan. Also, the bank checks the income and CIBIL score of the borrower before approving loans.

Punishment process

Loan approval is the process by which a bank approves an applicant’s loan. The bank provides loans according to the income of the borrower. If the loans are penalized, in this case the borrower can avail a certain amount of the loan which is penalized by the bank.

The bank approves loans of up to 80% of the property value to the borrowers. Borrower can avail lower amount of loans as compared to higher eligibility. Loans can be repaid over the years for which the term is approved.

Sanctions process is the approval process in which the bank grants approval for loans and later disburses the loan amount. The penalty confirms that the loan has been approved and therefore the borrower can proceed with the purchase of the property.

Once the loans are approved by the bank, in this case, the bank submits the penalty letter which must be shown to the real estate developer to confirm the apartment reservation and the applicant can proceed with the down payment.

In the process of imposing penalties, the borrower receives a premium of financing judiciously, and in the case of resold property, the lender disburses the entire loan amount each time.

exchange process

The loan is disbursed after the loans are approved. Thus, the payment helps the buyer to pay the money to the buyer and thus the buyer can complete the payment process for the property.

In the case of disbursement in case of resale, the bank credits the entire amount in the borrower’s bank account, while in case of new construction, the lender pays the amount of installment to the builder in accordance with the agreement and also in accordance with the ongoing construction work.

The disbursement of loans requires the title documents of the proposed property as well as the estimated cost of the property. If the bank finds that the rate offered by the applicant is suitable, in this case, the bank imposes penalties on the borrower’s loans after completion of formal formalities, the bank disburses the loan amount into the borrower’s account.

The bank starts collecting equal monthly installments as soon as the loans are disbursed. The installments collected are expected to be paid on time by the borrowers. Thus, disbursement of loans after penalty is necessary to be done on time in case of home purchase. The buyer can acquire the property only after full payment of the property.

Loans can be obtained from any of the lenders for new construction property as well as for resale property. Loans can be obtained from any of the lenders among the private banks, cooperative banks, public sector banks or national finance banks. Loans can be approved for a maximum period of 30 years. The interest rates on the loans range from 6.40% to 12% per annum. Loans obtained must be repaid on time by the borrower to avoid the imposition of a fine. Thus, interest rates on loans are available at competitive interest rates by the borrower.

(The author is CEO of Andromeda Loans and Apnapaisa.com)

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