Home Loans in Chennai

How to Get a Home Loans in Chennai

Chennai, which is the capital of Tamil Nadu is one of the best cities in India. It is well-known for its unique culture, industrial growth, ever-expanding job opportunities, a large number of educational institutes, a plethora of entertainment options, and cosmopolitan yet peaceful life. All these make Chennai a very congenial place to live in. People from the surrounding villages, towns and other cities in India relocate to Chennai for their jobs. Whether it be for tax investment or for settling down, people are on the lookout for properties. With the real estate sector booming and a mushroom of builders constructing beautifully styled houses, the number of people buying homes is growing day by day. But, homes are highly-priced, and home loans are a feasible option to finance your house.

Home Loan Application Process Step by Step in Chennai

Before digitization, the home loan application process was complicated and time-consuming. But nowadays it can be done easily and quickly online. The process involves the following steps

Fill in the loan application form and submit your documents to the lending institution. These are the documents required by lending institutions generally.

• Identity Proof
• Address Proof
• Age Proof
• Educational certificates - school/degree certificates

For salaried employees

• Employment proof
• Income proof - 3 months salary slips if the person is a salaried employee 
• Bank statement - for the latest 6 months
• Latest Form 16

For self-employed

• IT returns for the last two years
• Other income documents

Pay the processing fee, which will be used by the lending institution to verify your details and scrutinize the property’s value as well as the title. The processing fee will be a percentage of the loan amount or fixed.

You have to wait until the lending institution checks the documents submitted by you. This will usually take 1 to 2 days or less depending on the accuracy of the paperwork submitted. The lending institution may call you or ask you to visit them in order to discuss the papers. In case you are self-employed, then officials from the lending institution may visit your premises to see how your business is performing.

The lending institution evaluates your capacity to repay the loan. In this process, the lender checks

Workplace credentials, such as contact number and address

• Residential address (both present and previous) and contact number 
• Credentials of your employer

The Loan Approval Process 

The lending institution checks the documents provided by you, such as 

• Your monthly and annual income papers
• Your age and educational documents
• Your bank transactions
• Your current employer’s stability 
• If you are self-employed, then the nature of the business or self-employment
• Your capacity to pay the EMIS at the specified rate of interest

Based on the information you have provided, the lending institution sanctions the loan specifying the maximum loan amount. If you do not fulfill the eligibility criteria set by the institution, then your loan application gets rejected

Additional read: Reasons for loan rejection

• The bank then sends you a loan approval letter containing the sanctioned loan amount, rate of interest, fixed or floating rate of interest, duration of the loan, method of repayment, terms and conditions of the loan
• You should then send the acceptance for the approval letter
• Once the loan has been approved, the lending institution will do the following 
  • It checks the title of your property to ensure that it does not have any controversies surrounding it
  • It conducts a technical evaluation of your home
  • If the home is under construction, it will check the stage, progress and quality of construction as well.
  • If the property is being resold, then the age and durability of the home will be checked. You will have to submit all the papers related to the home.
• The lending institution then prepares the final loan agreement, which you will have to sign. You have to deposit all the home-related documents with the lender until you pay the loan amount in full.
• Finally, the loan amount gets disbursed, and the lending institution hands over the cheque to you or sometimes, it may be addressed in the name of the builder if you are going to purchase the property from one. After the disbursal of the loan, the lender sends you the repayment agenda

What are the Common Eligibility Criteria for Home Loans in Chennai?

• Your age is a very important qualification to apply for home loans. Lending institutions set the minimum and the maximum age limits for loan applicants, and if you do not fall in that range, you will not be able to apply.
• You must either be salaried or self-employed. The lender will investigate your annual income and employment status to determine if you are eligible for the loan.
• Your Credit Score helps the lender in determining the amount of loan that should be sanctioned as well as the interest rate.
• You need a minimum income to qualify for the loan, as lenders set this as an eligibility criterion based upon which they decide if you can repay the loan. You need to provide documents for the lender to verify the same.
•  The majority of lenders provide home loans only to resident Indians.
• When you apply for this loan at an early age, the duration of the loan is higher. This will result in feasible EMIS and rates of interest. Most  of the lenders will require you to be in the age group of 21 to 70 years (maximum retirement age in case of salaried employees)
• Lenders will also consider your external liabilities while evaluating your application. This is in order to ensure that you don’t default on your EMIS. If you are a person without any external liabilities and a sound repayment ability, you will be considered as a top applicant for home loans.

List of Some Top Home Loan Providers in Chennai

Home Loans in Chennai FAQs