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The Turnaround Time (TAT) for home loan disbursement refers to the time it takes for a
bank or financial institution to approve and release the home loan amount to the borrower
after receiving all the necessary documents and completing the verification process. The
TAT can vary based on the lender, type of property, and completeness of the application.
Here’s a breakdown of the typical home loan disbursement process and the TAT at each
stage:
Steps in the Home Loan Disbursement Process:
1. Loan Application Submission:
- Borrower submits a home loan application with all the required documents.
○ TAT: 1-2 days to check if all documents are in order.
2. Verification Process:
- The lender verifies the borrower’s personal information, financial records, and
the legal status of the property. This includes checking the applicant’s credit
score, income stability, and property documents (legal and technical).
○ For salaried individuals, the lender may contact the employer for confirmation,
while for self-employed individuals, additional financial documents may be
scrutinised.
○ TAT: 3-7 days (for basic verification), but can extend depending on the
complexity and location of the property.
3. Loan Approval and Sanction Letter
- After verification, the lender provides a sanction letter outlining the loan
amount, tenure, interest rate, and terms and conditions.
○ Borrowers must review, accept, and sign the sanction letter.
○ TAT: 1-3 days to issue the sanction letter after verification is complete.
4. Loan Agreement Signing:
- After the borrower accepts the sanction letter, the formal loan agreement is
prepared, and both parties sign it.
○ TAT: 1-2 days to complete the documentation and signatures.
5. Property Valuation and Legal Check (Final Stage):
- ○ The lender conducts a property valuation and legal check to ensure there are
no encumbrances (such as legal disputes or previous debts) on the property.
○ TAT: 3-7 days depending on the property type and location.
6. Disbursement:
- Once all documentation, verification, and legal processes are completed, the
lender releases the loan amount. For under-construction properties, the loan
might be disbursed in tranches (instalments), while for ready-to-move-in
properties, the disbursement is made in a lump sum.
○ TAT: 2-5 days after signing the loan agreement and completing all formalities
Typical Overall TAT for Home Loan Disbursement:
- Simple cases (complete documents, ready-to-move-in property, salaried individual):
7-10 days.
● Complex cases (under-construction property, legal complications, or incomplete
documents): 15-30 days.
Factors Affecting TAT:
1. Completeness of Documents: Incomplete or missing documents can delay the
process.
2. Property Type: Loans for under-construction properties usually take longer due to
disbursement in tranches.
3. Legal and Technical Verification: Any legal complications with the property title can
delay disbursement.
4. Lender’s Internal Processes: Some banks or financial institutions may have faster
or more streamlined processes than others.
5. Borrower’s Credit Profile: A borrower with a good credit score and clear financials
can expect a faster TAT
If you are applying for a home loan, it’s advisable to ensure that all your documents are in
order and the property’s legal status is clear to avoid delays in disbursement. Let me know if
you need more details or advice on speeding up the process!
FAQ
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