Personal Loan Disbursement Process

Personal Loan Disbursement Process

Many lending institutions provide customers with quick and reasonable personal loan options. But when it comes to the disbursal procedure, Uncertainty often gets out of control.

If you want to get a personal loan, you should think about how it will be disbursed. By doing this, you may be confident that you will get the loan amount when you need it.

Personal Loan Disbursement Process

The lender will email or post you an approval letter if your loan has been approved. Along with other information, the sanction letter will state that your loan application has been approved.

Personal Loan Sanction & Disbursal Time Of Different Lenders

LenderSanction & Disbursal Time
IndusInd BankWithin 4–7 working days after receiving the loan application, the loan is disbursed.
Bajaj FinservInstant sanction and approval, with the disbursement likely to occur after the approval in no more than 24 hours.
YES BankApplication approval and sanction within 5 days. Disbursement following the sanction within a few hours
Tata CapitalOnline Application – Instant ApprovalOffline Application – Approval within Few Working DaysDisbursal – Within 72 hours after the application is received
Fullerton IndiaInstant sanction and approval, disbursement within 30 minutes after approval
HDFC BankIn just 4 hours to a maximum of 3-4 working days
ICICI BankIn just 3 seconds to a maximum of 3-4 working days

Processing Of Personal Loan Application

Depending on how relevant the information provided is, the loan application will be processed in 24 hours to a week depending on the lender.

Steps In Personal Loan Disbursement Process:-

Step 1:- Making a Personal Loan Application

You must submit a loan application first for obtaining the personal loan. For processing of your personal loan application you must send certain documents in addition to your personal loan application to the lender, including:

  • ID proof
  • Address proof
  • Income proof
  • Bank statements
  • Income Tax Returns (ITR)
  • Two passport size photographs

Step 2:- Approval of Loan

The lender will start the approval process once you have submitted the loan application and all necessary documents. Depending on the lender the duration of the approval process can vary.

If you are an existing customer of the bank, loan approval will generally happen more quickly. 

Step 3:- Disbursement of loan

If your loan is approved the lender will email or post you an approval letter. Your loan application’s approval will be noted in the sanction letter along with other information, such as the interest rate, loan amount, Equated Monthly Installment (EMI), etc.

Disbursement of a personal loan after approval may take 1 to 2 working days depending on the lender. After that you can visit the lender to obtain a cheque of the loan amount. Nowadays, most lenders either mail the cheque or credit the loan amount directly into the borrower’s bank account.

The loan amount that has been disbursed may vary with the agreed-upon sanctioned amount. The sanction letter is just a statement from the lender that you meet the requirements for a specific loan and are therefore qualified for it. Once the loan has been approved, you must still go through additional formalities before you can collect the disbursal loan amount.

Also Read – List of Banks offering Personal Loan Interest Rates

Repayment of the loan

You can start repaying the loan as per the terms of the loan once you have received the amount of the loan. For paying the loan  EMIs either post-dated cheques or the Electronic Clearing Service (ECS) can be used.

If you already have an account with the bank from which the loan is obtained, you can also give  standing instructions to the bank for the automatic debit of your monthly installments on a specific day of each month. For avoiding penalties for missing or paying late it is advisable to pay your monthly EMIs on time.

Personal Loan Foreclosure

If you receive a significant sum of money, & want to repay it all before the repayment term of the loan you can avail the option of personal loan foreclosure / pre-closure.

Under personal loan foreclosure/preclosure you can repay the entire loan amount before its repayment term. Due to this option not only will the interest liability be reduced, the loan account will be closed early as well. 

The complete loan application process will be more pleasant and simple if you are aware of the basics, such as personal loan disbursement. To avoid future misunderstandings, make sure to carefully review the loan documentation, especially paying attention to the interest rate, penalties, and repayment terms.

FAQ’s

Can I cancel the loan after disbursement?

No, when a loan has been disbursed, it cannot be cancelled. It can only be cancelled before the loan amount has been disbursed.

What is the disbursed amount?

To disburse implies to pay out, typically from a fund that has been accumulated for a specific purpose.

What is the loan disbursement date?

The actual disbursement date is the date when the loan amounts are made available to the borrower. Because several terms and conditions of the loans are tied to the actual disbursement date, this date must be accurately reported.

What happens after a loan is disbursed?

A confirmation letter from the lender will be sent to you after the loan has been disbursed. Usually, it is sent via post or email. A welcome kit is usually included with the confirmation letter.

What is the process of disbursement?

The process of disbursement converts the payment data into a disbursement instrument. Payments to the vendor are made as a result of disbursements, which satisfy the payable.

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