Summary of this article
Navigating the home loan process can be intimidating, especially for first-time buyers and digital natives. AI-powered interactive platforms are gradually making this journey more accessible by offering personalized support along the way.
Buying a home has traditionally been among the most complex financial decisions for many Indians. From endless documentations to long waiting periods, first-time homebuyers face multiple challenges. However, this is now changing with the finance sector's quick adoption of Artificial Intelligence (AI).
Breaking New Grounds
Valued at over $420 billion in 2024, the Indian mortgage market is gradually taking baby steps towards the digital revolution, driven by increasing participation from the millennial and Gen Z cohorts. Lenders are embracing AI-powered tools to simplify a long-drawn, cumbersome process.
According to an EY India report, over 60 per cent of borrowers now favour digital communications for loan services, a move further augmented by the pandemic. Since AI can analyse vast data quickly, from spending behaviour to credit history, it helps generate an all-inclusive borrower profile within seconds. This allows lenders to offer customised products swiftly, a significant advantage for first-time homebuyers.
"AI offers significant advantages to lenders. It acts as a strategic enabler by automating credit assessments and lead qualification, freeing up human teams to focus on high-value advisory roles. AI models can also help reduce default risks by analysing buyers' behaviour more accurately," says Atul Monga, CEO & Co-Founder, BASIC Home Loan.
For instance, some AI platforms enable lenders to pre-screen borrowers, analyse property data, perform instant credit checks and property checks, and direct eligible leads, allowing for a more optimised and efficient loan process.
Smart Forecasting For Both
Earlier, lenders resorted to manual tasks like using static sheets or aggregator websites to compare loan products. Today, AI-powered lending platforms can bring far superior precision to the process. Machine learning models help simulate various situations.
For example, a 25 bps rise in repo rate may impact EMIs or suggest the best lender based on the borrower's financial goals. These tools serve as a guide for first-time homebuyers, many of whom often have limited financial literacy.
"A PwC report highlights that AI adoption in India's BFSI sector has the potential to reduce credit processing costs by up to 30 per cent, while enhancing compliance and accuracy. This efficiency directly translates into improved customer satisfaction – a crucial differentiator in a highly competitive market," says Monga.
What's In It For Borrowers?
Navigating the home loan process can be intimidating, especially for first-time buyers and digital natives. AI-powered interactive platforms are gradually making this journey more accessible by offering personalised support along the way.
By simplifying communication and offering real-time assistance, AI platforms are helping make the loan process less daunting and more user-friendly.
The Road Ahead
"Walking the path of economic growth, India's housing market is projected to reach the $1-trillion mark by 2030. AI will be at the heart of this transformation, empowering the next generation of homebuyers. Mortgage chatbots are symbolic of a shift towards smarter, more informed decision making," observes Monga.
The age of long waiting times, endless queues, running after loan officers and cumbersome paperwork is giving way to a smarter epoch of home financing. AI is enhancing human expertise, helping buyers make their biggest financial decision with clarity and confidence.
