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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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  • Disbursement of home loan means the release of payment of the Loan amount to the borrower by the lender. This can be done in two way first is releasing full amount at once this is called as full disbursement and the second way in which the amount will be released in installments and slowly as per the requirement this is called as partial disbursement.
    If we take the full disbursement then the interest will be calculated on the full amount from the day of check issued to the borrower and not from the date of pickup of the check from the bank.
    If we take partial disbursement then the interest will be calculated only on the amount which is released by the bank hence the EMI.
    Partial disbursement is beneficial if we are taking loan for some construction work or anything like that in which full amount is not required at once, then we should definitely go for the partial disbursement because the interest will be calculated only on the amount taken from the bank.
    Full disbursement will be beneficial if we are taking loan for something in which full payment is to be made at once after the payment of downpayment like if we are buying a house or an Apartment which fully constructed and we are buying that from someone then in these cases we have to pay full amount at once then the disbursement required will be full disbursement which would be done after the verification of the documents then the check of full amount will be handed over to the loan taker.

  • Refinancing is when a person revised a payment schedule for repaying debt,the old loan is paid off which is replaced with a New loan.Usually if a company refinances it extends the maturity dates and a person or a company refinancing loans may have to pay a penality.A common goal for refinancing is to pay less interest over the loan and sometimes based on the loan types offered.
    While taking a loan from the bank one should decide whether to make full payment or partial payment For the product he is taking.For example if a person is purchasing a house which is fully constructed he can opt for full payment as it is paid at once after the downpayment than the interest is calculated on the full payment then it is beneficial for him.If a person is taking a loan in which full amount is not required at once he can opt for partial payment as the interest is calculated only on the amount released by the bank that is the EMI which Will be beneficial for him.

  • Sir I have taken loan for construction of my house and the loan amount sanctioned is 35 Lakhs, my question is if the bank disbursed is 30 lakhs only in the final stage, then they will disbursed the remaining 5 lakhs after completing the house? That is after completion of house they will release whatever pending money in 35 lakhs has been disbursed?

  • Hi i have taken home loan from DHFL and they disburse the case but not handed over me cheque and EMI started. I have paid almost 2 EMIs, they said that file is pending with RCU department. My question is that how bank can start EMI with out all verification

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