Banks clear home loans faster, but there’s a catch

  • Mahua Venkatesh, Hindustan Times, New Delhi
  • Updated: Dec 05, 2015 11:15 IST
The home loan segment has been growing in recent times. (HT photo)

When 41-year-old Kavita Chandra enquired about a home loan, she was pleasantly surprised to hear that the “processing and documentation” would be done at her doorstep and she was not required to visit the bank branch. The bank official armed with latest gadgets arrived at her residence. All Chandra had to do was to provide him with all the original documents. The official scanned them right in front of her and “fed” them in. Her credit score was accessed. And within a few hours, Chandra’s home loan was sanctioned.

You don’t need to wait anymore for weeks to get your home loan approved. The process is now much faster and easier.

“In recent years, we have chosen a technology-led approach to offer home loans… by introducing convenient and paperless application at the customer’s premises through tablets and smartphones. Real-time capture and transfer of customer details to the bank’s systems enables quick processing of the application within a few hours,” Rajiv Sabharwal, executive director, ICICI Bank, told HT. However, there is a caveat.

The loan is “partly” approved in the initial phase. Banks will also check the records of the builder and the “quality” of the property. So even if the loan has been sanctioned in principle, the disbursement may take a few days.

“There is a gestation period, after all 40-45% of your salary is being leveraged, so you should not do anything in a big hurry,” Sanjaya Gupa, managing director, PNB Housing Finance, told HT.

With India having more than 65% of its working population under the age bracket of 35 years, demand for home loans is growing. Banking analysts say lenders, too, prefer a younger borrower, with longer work life, so that the repayment tenure would also be longer. Longer the tenure, the higher is the earning for the lender.

In 2014-15, more than 40% of the borrowers were less than 35 years, a CIBIL study revealed. However five years ago, only 30% of the demand came from this age group. The demand is only likely to increase further.

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