From Application To Approval: Navigating The LIC Housing Finance Home Loan Process

Like many others, you must also dream of owning a home one day, or if you are good with finances, maybe today could be that day. No, we are not suggesting you meet the property seller with a bag full of cash, even if you have it! We are talking about securing a home loan. But navigating this process can be daunting.

To start with, which lender should you choose to start your home-buying journey? One name that stands out from the rest is LIC Housing Finance Limited (LIC HFL). LIC is already a household name because of its diversified insurance products and investment options. Hence, it comes as no surprise that LIC HFL is considered a leading home loan provider, especially because they offer flexible repayment options and attractive interest rates (as low as 8.25% per annum).

Are you a first-time applicant who requires guidance? You are in the right place! This guide will help you navigate the LIC Housing Finance home loan process, right from application to approval. Let’s go!

Step 1: Understand home loan eligibility

Preparation is key to avoiding rejection of your home loan application. Therefore, it is advisable that you first confirm if you qualify for LIC HFL’s home loan eligibility criteria before applying.

The following are typically taken into account by LIC HFL while considering an applicant:

• Age: Applicants should be between 21-60 years old.
• Stable income: Self-employed professionals, salaried individuals, and business owners can apply, provided they have income stability.
• Credit score: The chances of approval are higher if the credit score is 750 or above.
• Type of employment: Government officials, salaried employees, and self-employed professionals are eligible.
• Existing liabilities: Any financial commitments or outstanding loans might impact eligibility.

You can use LIC HFL’s eligibility calculator on their official website to check your eligibility.

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Step 2: Choose the right home loan plan

LIC Housing Finance provides various types of home loans, such as:

• Regular Home Loan: To buy a new house or flat.
• Home Construction Loan: In case you plan to construct a house.
• Home Extension Loan: To construct additional space or rooms in a house.
• Home Renovation Loan: For home extension and repair.
• Balance Transfer Loan: If you wish to shift an existing home loan from any bank to LIC HFL due to higher interest rates.

The selection of the appropriate loan depends on your need, budget, property type, and repayment ability.

Step 3: Gather and prepare all the required documents

Proper documentation is the key to not having a lengthy application process. Regularly asked documents are:

• KYC documents: PAN Card, Aadhaar Card, and passport-size photos
• Income evidence: Three months pay slips, Form 16, and six-month bank statements for salaried employees. ITR for three years, profit and loss accounts, and business registration proof for self-employed individuals.
• Property records: Title deed, sale agreement, and approved building plan.

Complete and correct document filing enhances the pace of approval and reduces the possibilities of a rejection.

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Step 4: Apply for the home loan

There are two methods to apply for a LIC Housing Finance home loan:

• Online: Log in to the LIC HFL website, complete the application form, upload documents, and submit the request.
• Offline: Go to a local LIC Housing Finance branch, obtain the application form, fill it out, add necessary documents, and submit it in person.

Step 5: Pay the processing fee

During application for a home loan, there is a non-refundable processing fee levied. This depends on the profile of the applicant and amount of the loan. It normally varies between 0.25% to 0.50% of the loan.

Step 6: Home loan processing & verification

After your application is submitted, LIC HFL will undertake the following:

• Proofread your documents: Confirm that all the documents presented are authentic and fulfill the requirement criteria.
• Verify your credit rating: Verify your creditworthiness.
• Confirm your income and employment: Confirm income stability via an employer or business verification.
• Property valuation: Evaluation of the property value and its legal status.

This can be completed in 7 to 15 working days, subject to the speed at which the documents are checked.

Step 7: Loan approval and sanction letter

If your application is found to be eligible by LIC HFL, you will be issued a Loan Sanction Letter, which contains:

• The approved loan amount
• Interest rate (floating or fixed)
• Loan tenure
• Terms and conditions
• EMI details

You must sign and return the letter agreeing to the terms.

Step 8: Agreement and loan disbursement

After you have accepted the offer:

• Sign the loan agreement: You enter into a legally enforceable loan agreement with LIC HFL.
• Disbursement process: The loan amount is disbursed in whole or stages, based on whether it’s for purchasing property or building.
• Mode of payment: The money is directly credited to the seller or builder’s account.

Step 9: Repayment and loan tenure management

Repayment begins as per the agreed EMI schedule. You have an option of different repayment modes:

• Automatic deduction from your bank account
• Post-dated cheques
• EMI payments online via the LIC HFL customer portal

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Conclusion

Financing a home from LIC Housing Finance is a systematic process that, when done in the right way, provides a smooth experience. By learning about eligibility and documentation and selecting the proper loan scheme, applicants can raise their chances of approval. For purchasing, building, or redeveloping, LIC HFL provides strong financial support to make your dream of homeownership come true.

FAQs

• How much time does LIC HFL take for loan approval?

It usually takes 7-15 days, but this depends on verification speed.

• What if my loan application gets rejected?

The application can get rejected due to low credit scores, low income, or missing documents. Issues can be rectified, and applications can be submitted again.

• Can I prepay my LIC home loan?

Yes, LIC HFL does permit partial or full prepayment of the loan. Certain charges might be applicable depending on the type of loan.

• How do I monitor my loan status?

You can monitor your loan application through the LIC HFL online portal or by contacting the nearest branch.