How to get home loans for apartments in Dhaka?

Buying an apartment in Dhaka can be thrilling, but sometimes it seems challenging, especially in financing. One of the ways to finance an apartment is to take a home loan. But how exactly is this done? What do you know before you apply? In this blog post, we will discuss how to get home loans for apartments in Dhaka, Bangladesh.

A home loan is a borrowing from a bank or other financial institution to finance buying a home or apartment. This would require an analysis of your income, savings, and expenditures. Almost all banks will require that you pay part of the cost of buying the apartment at once almost 10% to 30% as a down payment.

Need a home loan for an apartment? Follow our guide to understand the process and find the best deal for your budget. Get started now!

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Understand the basics of Home Loan

Before availing of a home loan, it is important to know how these loans work. A home loan refers to an amount borrowed from financial institutions usually banks for buying properties with the term to repay it in installments along with interest. Important factors about this are:

Tenure of the loan: The loan period varies anything between 10 to 25 years.
Interest rates: May be fixed or floating.
Loan-to-Value Ratio (LTV): Most banks lend about 70-80% of the property value.
Eligibility criteria: Income, credit score, and job stability are some factors that would influence the loan approval.

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Research banks and financial institutions

There are many banks and financial institutions from which people can get a home loan in Dhaka. It is crucial to compare various offerings provided by the institutions so that they can get a better deal. Some of the reputed financial institutions and banks are:

Sonali Bank
House Building Finance Corporation
BRAC Bank
Dutch-Bangla Bank Limited (DBBL)
Islami Bank Bangladesh Limited
Dhaka Bank
City Bank

Note: You must consider the following when applying for a loan:

Interest rates and repayment option
Processing fees and other charges
Customer care and reputation

Determine your loan eligibility

Most often, banks will consider the financial profile of the individual to assess eligibility to repay the loan. Some general criteria are:

Age: Normally falls within the age range of 21 and 65 years.
Income: Stable and sufficient monthly income would be attached.
Employment Type: Salaried employees, self-employed, and business owners can apply.
Credit score: A 650 or above would be generally acceptable.
Existing debts: The higher the current debts, the lower your eligibility.

Prepare the required documents

Prepare all the essential documents that are needed for the application procedure to shorten the process. Here is a checklist:

Proof of Identity: National ID card or passport.
Proof of Income: Salary slips, bank statements, or tax returns.
Proof of Employment: Appointment letter or license for business.
Property Documents: Sale deed, property agreement, or allotment letter.
Bank Statements: Over six to twelve months of transaction history.

Calculate your loan amount and EMI

Know how much you want to borrow, and know that you will be able to live comfortably with the EMIs. Most banks provide online calculators to let you do the following:

To determine loans as per income and expenses.
Estimate EMI by varying tenure and interest.
Understand the repayment schedule.

Note: Keep EMIs below 40 percent of your monthly income.

Apply for pre-approval

Pre-approvals require the submission of personal financials to the bank. It validates the profile to come back with an approval letter specifying a loan amount eligible for borrowing. Obtain a pre-approved home loan, and enjoy advantages such as:

Clear nature of the amount that can be borrowed.
Processed loans faster.
Greater assurance when negotiating for a property.

The whole process of getting a home loan

Getting a home loan can be a complex process, but it’s essential for purchasing an apartment. Here is the complete guide outlining the whole home loan process in Dhaka

Application submission: Submit the loan application to the bank comprising all the necessary documents.
Verification: Verification is concerned with financial details against property documents at the bank.
Sanctioning: Finally, on approval by the bank, a sanction letter regarding the terms and conditions of the loan is issued.
Disbursement: The amount of the loan is given either as a single disbursement or in installments as agreed during the signing of the agreement.

Be aware of hidden costs

Other than the obvious home loan repayments, borrowers often overlook the additional expenses. Planning these costs accordingly will eliminate any nasty financial surprises later on. Here are some additional expenses:

Processing fees
Legal and technical valuation charges
Prepayment or foreclosure charges
Stamp duty and registration fees

Consider Islamic home financing options

Shariah-based "home loans" comply with Islamic laws which are primarily contradictory to the concept of riba (interest) according to the Qur'an. Islami Bank Bangladesh Limited offers Sharia-based home loans instead of interest-based loans to buy properties.

Compared with their counterparts in Islamic home financing under Shari'ah compliance. It will be more useful to engage an adviser who understands and works through different alternatives. Islamic Home Lone is your best home purchase option without having the ties of interest-based loans.

Final remark

Getting a home loan for an apartment in Dhaka is not an easy task. A little understanding of the essentials, required documents, and picking the most appropriate lender are very essential. The first step would be to assess your financial position, check for eligibility, and compare loans.

As one of the leading real estate companies in Bangladesh, Assure Group works very closely with reputed banks and financial institutions. We ensure that you will get the best of options whether it is residential or commercial without all that annoying paperwork. Ready to own your dream apartment? Call us at +8809612-008800.

Frequently asked questions

Many of the banks in Dhaka offer home loans for home construction. However, they will make payments in phases depending on the progress of the construction.

Yes, Islami Bank provides all forms of Islamic home financing. They give home loans under profit sharing, not the interest rate. Therefore, it is suitable for people who want an ethical way of financing.

Though approval of loans will differ from one case to another, the normal time of approval will lie within the limit of 2-4 weeks. The determining factors will include verification of documents, evaluation of the property, workload in the bank, etc.

Most banks allow early repayments of their loans; however, some may charge a fee for early repayment. Verify with the lender for these terms before going for such an option.

Most banks worldwide provide the loan transfer or refinance option, which helps repay the loan at one bank while switching the loan to another bank with better interest rates or other terms. This requires an analysis of other costs before movement.