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Loan Disbursement

Home Loan Disbursement - HDFC, SBI, All Banks

Last Updated 23rd Sep 2020

  • Home loan disbursement refers to the process of providing the home loan amount to the borrower.
  • Bank or housing finance companies disburse the amount after the technical appraisal of the property, documentation and down payment being made in full.
  • The home loan amount can be disbursed online or offline.
  • The amount disburses in full or in stages depending upon the stage of completion of construction.
  • You can check the details of loan amount disbursed, EMI instalments paid etc in your home loan statement.

What is Home Loan Disbursement?

Home loan disbursement refers to the release of the credit amount by the bank or financial institution to the borrower. Generally, the lender disburses the loan amount once all the legal formalities are done, documents submitted, and the down payments are made. The amount can be disbursed in stages or in full depending on the stage of construction completion of your house.

Key Stages under Home Loan Disbursement Process

The important process under home loan disbursement process are:

  • Documents Submission: First and foremost, individuals are required to submit a signed duplicate copy of the offer letter and they will be intimated about the property documents needed for disbursal of the home loan.
  • Legal Examination of Documents: Then, property documents like own contribution receipt, no objection certificate, and sale deed will be examined by a legal expert. Further, the bank may ask for additional documents.
  • Down Payment Amount and Date: Individual will then be intimated regarding the date of the down payment and the first instalment required.
  • Verification of Property: There is technical and legal verification of the property in compliance with the sanction letter's terms and conditions.
  • Disbursement of the Loan: After the successful verification of all the documents loan will be disbursed.

Check Home Loan Disbursement with All Banks

The process of home loan disbursement varies across banks depending upon the requirement of the amount. Here is the home loan disbursement process for some of the leading banks.

HDFC Home Loan Disbursement

HDFC disburses home loan only after the completion of the following process:

  • Value of the property has been ascertained
  • The documentation process has been completed
  • Home loan borrower has made the down payment

After making down payment, the individual can make the request for home loan disbursement. The request for disbursement can be made either online or offline. For making the request offline, the individual is required to visit the branch office while for online disbursement, the individual can visit the bank's official website and login the user ID and request for the loan disbursement. Bank will either provide the loan in a single instalment or multiple instalments according to the terms and condition of the particular loan. In case of multiple instalments, HDFC may ask you to pay ‘pre-EMI’ interest till the disbursement of the full amount after which the EMI starts.

SBI Home Loan Disbursement

Home loan disbursement process of State Bank of India involves the following steps:

  • An individual will have to provide all the relevant documents to the bank authorities.
  • The mortgage has to be made in favour of the bank. Wherever creation of a mortgage is hampered due to any valid reason, required security including third party guarantee, has been taken for a short period.
  • The loan amount will be disbursed in a single instalment or multiple according to terms and condition of the particular home loans.

ICICI Bank Home Loan Disbursement

ICICI Home loan disbursement process involves:

  • Submit Application and Documents: First of all, fill the application form along with all the relevant documents like KYC, income and property documents.
  • Documents Verification: The legal verification of all the property-related documents will be done.
  • Property Valuation: After the legal valuation of documents is done, the bank will do the valuation of the property and give a property valuation letter.
  • E-stamping: Then, the Sales agreement and Construction agreement to be stamped.
  • Disbursement: Once all these formalities are done, the home loan amount is disbursed.

Axis Bank Home Loan Disbursement

Home loans disbursement process of Axis Bank includes the following steps:

  • Documentation: Individuals are required to provide all the relevant documents including income and property documents for applying for a home loan.
  • Document Verification and property valuation: After all the documents are submitted, bank authorities will check the authenticity of all the documents and the eligibility of the borrower. Further, the technical officer will do the valuation of the property and will provide a valuation letter.
  • Home loan disbursement: If the bank is satisfied by all the documents provided, the home loan amount will be disbursed to the borrower.

DHFL Home Loan Disbursement

  • Home Loan Eligibility Assessment: DHFL first checks the eligibility of the customer and does the income verification and validates the accuracy of the information provided. Further, the bank also checks the credit report and then concludes the amount which can be approved in the form of a loan.
  • Conditional Home Loan Sanction: If there are no issues in income verification and credit checks, DHFL will provide conditional sanction for your loan. Conditional sanction refers to the process in which the bank will issue a formal Letter of Offer cum acceptance favouring all the applicants to the loan.
  • Assessment for Home Loan
    Technical Assessment: A technical officer will conduct a valuation of the property individual wishes to buy and the property that will be pledged.
    Legal Assessment: A lawyer will examine the property authenticity of documents.
  • Disbursement of home loan: After all the verification and valuation, the home loan amount will be disbursed.

Types of Home Loans

Banks and financial institutions offer home loans for a variety of purposes. Some of them are:

  • Loans for Purchase of Land: As the name suggests, a loan for the purchase of land is a loan which is used for buying land. The land acquired can be used to construct homes or can be purchased solely for investment. Generally, banks and financial institutions lend 80% -90% of the price of the land.
  • Regular home loan: A regular home loan is the most common form of home loan. It is used to buy a residential property like flats, bungalow, house or any other type of property that is either newly constructed or under construction. Banks and financial institutions lend 80% -90% of the price of the home. The interest charged on loans for a home purchase can be fixed, floating or hybrid.
  • Loans for Construction of a House: Banks and financial institutions also offer home loans to individuals who want to construct a house according to their specifications. The loan amount is decided based on an estimate of the cost of construction loan. The amount may be disbursed at one go or in several instalments.
  • House Expansion Loans: Home renovation or additional construction for a balcony or room may seem easy, but the skyrocketing cost of constructions makes it difficult to renovate a home on one's own funds. House expansion loans assist in meeting that cost.
  • NRI Home Loans: NRI home loans is a unique home loan which assists NRIs to meet the financial requirement for the purposes like purchasing a house, building a house/property or renovating an old property in India.

FAQs

How long does it take for home loan disbursement?

There is no fixed time for home loan disbursement. However, it takes around 7 days to 4 weeks for home loan disbursement.

What is the process of loan disbursement?

The process of the home loan disbursement includes
Step 1. Documents submission
Step 2. Legal Examination of Documents
Step 3. Down Payment Amount and Date
Step 4. Verification of property and documents
Step 5. Home loan disbursement

Can I cancel my home loan after disbursement?

No, a loan cannot be cancelled once it is disbursed. The loan can only be cancelled before the disbursement of the amount.

How is the loan amount disbursed?

The home loan amount may be disbursed in a single instalment or full amount according to requirement & terms and conditions agreed upon. In the case of partial disbursement, the borrower may need to pay interest as ‘pre-EMI’ till the full amount is disbursed after which the EMI payment starts.

What is the disbursement process?

Disbursement is the process of paying out money. For example, disbursements paid out to run a business, cash expenditures, dividend payments, and others.

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