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Disbursement Process OF Home Loan In India

What is meant by the term, Disbursement of Home Loan? If indeed, we may ask being oblivion’s of the terms used by various banks/banking institutions?



Well, let us try and answer the proposed query, mentioned above



So, what is home loan disbursement?


Disbursement means payment or release of the loan amount by lender to borrower. Usually, or generally, banks or banking institutions tend to disburse the loan amount, likely, once all the submitted documents have been verified and the down payments have been paid. Most banks or banking institutions however one may put it do charge a loan disbursement fee which is and can eventually be added to the principal amount, when loan is granted by the bank or banking institution and gotten to the loan taker. Click here to read about Axis bank home loan.



Let’s note a specific term:–


Full disbursement:

This term implies that case in which the bank or banking institution pays the full loan amount to the loan taker in one go, all at once, in a sudden.


Partial disbursement:-

This is the situation when the payment is done, perpetually, in stages. Usually and generally, one buys an under construction property then, the bank or banking institution tends to, and will disburse payments, slowly, as the construction progresses.


Disbursement of home loan


Let’s see for example:-


Say one takes a loan in order to help build one full house.


The payment or disbursal of the home and home loan will be made after completion of every floor, for ex: on completion of first floor, 15% of the payment will be made.
Let’s read on


If you are a loan taker. Let’s understand this topic in second person narrative, in order to get a good understanding.


If you provide documents to support that you have made an excess payment from your own account, the housing or home loan cheque will be handed over to you directly by the bank. That is, full disbursement of home loan, to you, the loan taker.



However, there is exist a few tips that have to get noted and be paid heed to


All of the banks/banking institutions charge interest given on the loan amount from the day on which the cheque has been made and not from the day on which the cheque is handed over to you.


So, it is best to take the delivery of the cheque the same day or the very next day in order to avoid paying extra interest on any borrower money that is, housing loan amount.


Always ensure that the amount of simple interest is available in your bank account to avoid dishonour of the cheque.


Usually, home loans or housing loans, are disbursed on the basis of the stage of construction of the property. So, in case of resale or ready possession properties, the disbursement is full and, let’s say, final. However, in case of under‐construction properties, the payment is made in parts, also known as part‐disbursement.



Each option would have different disbursement processes

Then, as mentioned above, there are also, the case of PART DISBURSEMENT.
When a housing or home loan is partly disbursed, the bank does not start EMIs immediately, since it is calculated on the total loan amount at a particular rate of interest and keeping in mind, disbursal periods.




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