Buying a home is a lifetime dream for many. A home is both a financial and emotional asset. It is a place we can call our own - a space where we can enjoy, relax and build a lifetime of memories with our family. It is also a worthy financial investment that we can leave as a legacy to our future generations. 

The biggest obstacle to buying a home is the sky-high real-estate prices. Today, the cost of ready-to-move-in homes averages around 40 to 50 lakhs in cities, and can even go up to crores, depending on the location, amenities and other features. 

This is where a home loan comes into the picture. A home loan provides borrowers with the requisite financial capital to make their home dreams come true. But, for your home loan to be approved, you have to meet the eligibility criteria and other terms and conditions stipulated by the lender. 

Getting approved for a home loan is not easy. You have to provide a huge list of documents including proof of employment, proof of income, property documents and more to the loan officer. Additionally, you should have a good credit score and a stellar credit history to be approved. It can feel overwhelming and at times, you may even be tempted to abandon the process mid-way. 

Worry not, CreditMantri has got your back! In this guide, we walk you through the do’s and don’ts to keep in mind while applying for home loans online. Following these tips will improve your chances of loan approval, quicken the approval process and also help you find the best deals on your home loan. 

Related: 10 Smart Tips to Get Your Home Loan Approved Quickly

Do’s for while applying home loan approval

  1. Do check your credit score 

A credit score is a three-digit number, determining your creditworthiness. The closer the score is to 900, the easier it is to get access to the best home loans. All lenders evaluate your credit score before sanctioning a home loan. So, if you’re in the market for a home loan, make sure to check your credit score first. 

If it’s less than ideal, take the right steps to improve it so you can get the best home loans at the best interest rates. 

Related: What is the ideal credit score for a home loan in 2021? 

  1. Do choose a home loan that you can afford

Due to the easy availability of home loans and competitive home loan offers, borrowers often tend to get carried away when they apply for home loans. They borrow more than they can afford and end up paying large EMIs that stretch their finances. As a result, they compromise on other crucial financial goals like building a corpus for retirement, saving for children’s education and so on. 

  • Don’t take a home loan for how much is offered, but stick to the amount that you can afford. 
  • Fix an EMI that you can easily repay without stretching your monthly budget. 
  • Calculate your overall monthly expenses and then decide the EMI. Ideally, the home loan EMI should not exceed 20% to 25% of the monthly income. 

Use a home loan EMI calculator to find the right EMI amount that works for your budget. 

  1. Do your research 

A home loan is a long-term commitment and you are likely to pay EMIs for at least 20 to 30 years at a stretch. So, you need to ensure that you choose the right lender who offers the best home loan deals. 

CreditMantri helps you compare home loans from different lenders on our website. Compare the interest rates, processing fees, eligibility criteria, prepayment conditions and zero in on the home loan that offers you the best deal. 

  1. Do fill the online application correctly with all required details 

Make sure to provide all the required financial information in your home loan application. Failing to provide key details like income levels, additional sources of income, ongoing debts could cause a delay in the home loan approval process and can even cause your application to be turned down. 

Also, ensure that you provide the correct details and do not make the mistake of fudging information as the lender is sure to find it out. Providing incorrect details not only delays the loan approval process but can even cause your loan application to be turned down. 

  1. Do save for a larger down payment 

The down payment is the amount you pay out of pocket to fund your new home. Ideally, home loans are sanctioned only up to 80% to 85% of the property value. The rest has to be paid by the borrower out of pocket. By providing a larger down payment, than the mandatorily required amount, you reduce the risk borne by the lender. This increases your credibility, improving your chances of loan approval. 

Related: How much down payment is required for a home loan of 25 to 30 lakhs?

Don’ts for while applying home loan approval

  1. Don’t go for a long tenure 

While home loans are available for a maximum tenure of 30 years, you should try to wrap up the loan as quickly as possible. The longer the tenure, the larger is the interest outflow. Here's a quick table to illustrate the impact of tenure on interest. 

Loan Amount

Interest Rate


Total Interest Payable

Rs. 40 lakhs


120 months (10 years)

Rs. 19,51,313

Rs. 40 lakhs


180 months (15 years)

Rs. 30,90,125


As you can see, with an increase in tenure, the total interest payable increases significantly. So, go for a shorter tenure with a comfortable EMI to reduce the overall loan burden. Use a home loan EMI calculator to play around with the tenure, to decide the right EMI that works best for your budget. 

  1. Don’t ignore the fine print 

This is one of the most common mistakes made by the majority of borrowers. Make sure to review the loan document top to bottom and familiarise yourself with the various terms and conditions especially the processing fee, late penalties and foreclosure charges. 

If you have any doubts regarding the terms or if you are not sure about the financial jargon, you can always contact the loan officer or a third-party consultant to help you understand them thoroughly. Make sure to sign on the loan agreement, only after you have understood all the clauses of the loan document. 

  1. Don’t quit jobs before taking a home loan

Lenders prefer borrowers who hold a steady job and draw a stable income. Your income and employment play a crucial role in determining whether your home loan gets approved or not. Quitting or changing jobs right before taking a home loan can cause loan denial. So, if you plan to purchase a home in the coming months, it’s a good idea to stay in your current job. 

  1. Don’t open new credit cards or take other loans, right before a home loan 

Keep in mind that the lender goes through your credit history before sanctioning your home loan application. Opening a new credit card or taking another loan increases your debt burden, which makes lenders cautious. So, it’s a good idea to put off new credit applications before taking a home loan. 

  1. Don’t hesitate to go for a joint home loan 

A joint home loan improves your home loan approval chances, especially if the co-applicant has a good credit score and is an earning member. Additionally, including a woman co-applicant also makes you eligible for concessions on the home loan interest rates. 

Wrapping Up

Following these 10 do’s and don’ts improves your chances of securing a home loan at the best rate and as quickly as possible. Bookmark this page and check these do’s and don’ts, while applying for a home loan online. 


  1. How will the lender decide the home loan amount I am eligible for? 

Lenders determine your home loan eligibility based on two key factors: your repayment capacity (your credit score and credit history) and your income. Other factors include your age, spouse’s income, assets and liabilities, employment history, and savings history. 

  1. How to apply for a home loan online? 

Start by selecting your preferred lender, then fill the online home loan application. Submit it along with the required documents. Note down the reference number, and you will receive a call back from the bank within a couple of working days, to discuss the loan terms and conditions. 

  1. My home loan got rejected even though I have a decent salary package. Why? 

There are several possible reasons: poor credit score, several ongoing home loans, not meeting the eligibility criteria of the lender, etc. Understand the reason for rejection and then work on overcoming it. 

  1. How long does it take for the home loan amount to be disbursed? 

The time varies from lender to lender. Generally, it takes around 7 to 15 working days for the loan amount to be disbursed once the documents are processed and the loan is approved. 

  1. Does an online home loan application actually work? 

Yes, today most lenders offer online instant home loan approval for eligible borrowers. Use the eligibility calculator on your lender’s website to determine your eligibility and then kick-start the loan application process for faster approval.