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How to Apply for a Home Loan : A Step-By-Step Guide

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Created on
January 16, 2023


What’s Inside

A home loan is a loan that you take specifically for buying or constructing a house. It is also considered a tax-saving instrument, and as of January 2023, you stand to get a maximum of ₹2 lakh as tax saving from your annual taxable income. Home loans are currently 7% and upwards, with most banks offering home loans at 8.5% per annum.

Applying for a home loan is now an online process, for which you’ll first need to check your eligibility for it. 

How to apply for a home loan online

Step 1: Check your home loan eligibility 

Lenders set different parameters based on criteria such as the age of the applicant, the income level, the nature of employment and the credit score. You can check your eligibility criteria online, or you can directly get in touch with the lenders (banks or NBFCs) you are interested in to check if you qualify.

At this point, it is important to mention that you should be careful whom you take a home loan from. There are a lot of lenders not approved by the RBI, and charge exorbitant interest rates. Avoid these lenders at all costs.

Step 2: Decide the particulars of your home loan

If you qualify for a loan, you need to figure out the finer details such as the amount you wish to borrow, the tenure of your loan, the interest rate and other such parameters. This will give you a better idea of the EMIs you will have to repay each month.  Once you have these details you can use an online EMI calculator to work out the EMI payments you’ll need to make.

Step 3: Compare offerings from different lenders

Different lenders have different eligibility criteria. Similarly, they also offer different interest rates. A lender with whom you have an existing banking relationship may give you more favorable terms, for instance. So, it always helps to compare the offers from various lenders in the market to identify the one that is most favorable to you. 

Step 4: Decide on a lender and fill in the application form

Once you decide which lender you wish to borrow from, you can fill in the loan application form either online or offline. Make sure that you fill in the details completely and accurately, so your chances of having the application approved are higher. Incomplete or wrong particulars could lead to rejection.

Step 5: Attach the necessary documents

You will also have to attach different documents needed for the lender to verify your requirements and your identity. Typically, these documents include identity proofs, residential proofs, proofs related to the property and income proofs.

Step 6: Pay the processing fee

The processing fee is generally around 1% to 2% of the loan amount. You need to pay this sum to the lender to finance the processing of the loan and to maintain the loan account for the funds you borrow. You can try to negotiate the processing fee slightly if you have an existing relationship with the lender. 

Step 7: Discuss and finalise the terms of the loan

The next stage involves discussing the loan terms, such as the rate of interest charged and the repayment tenure. You can put forth your suggestions or requests to the lender at this stage to ensure that you get loan terms that are affordable and in your favour. 

Step 8: Get your documents verified

Once the terms of the home loan are finalised, the lender will go through the documents you submitted and get back to you in case of any queries. After verification, if everything is in order, the next stage sets in.

Step 9: Get the final approval for the loan

Having verified your paperwork and application form, the lender will approve the loan, and the funds will be credited to the account details you provided.


Getting a home loan is a somewhat complicated process. But there are upsides to it - you get to save up to ₹2 lakh per year on your taxable income from the interest amount paid to the lender. Even if you had the money to pay the amount upfront instead of taking a loan, a loan is a good debt to have, as it lets you borrow money at a rate that’s lower than what the same amount would grow if invested in the market. Overall, a home loan, despite its complications, is a very useful financial tool to fund your home ownership aspirations.

As an aside, if you’re in two minds about buying a home vs renting one, you can use this rent vs buy calculator to help you make a decision. 

Frequently Asked Questions

What is the first step in applying for a home loan?

After you’ve decided which lender to borrow from, the first step to take care of when you apply for a housing loan online is to fill in the application form and submit it to the bank or the financial institution from which you wish to borrow the funds. 

What credit score is good to buy a house?

To ensure that you have a good chance of having your home loan application approved, it is essential to have a credit score of at least 650. That said, if your credit score is over 750, that would be even better since lenders tend to prefer such borrowers. 

How do I check if I qualify for a home loan?

To check if you qualify for a home loan from your preferred lender, you simply need to input the details they are looking for. These details typically include your age, income, nature of employment and credit score. Based on the information provided, you will get to know whether or not you are eligible for a home loan. 


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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