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Home Loan Disbursement Process

Housing Loan Disbursement - Details

Last Updated 23rd May 2022

  • Home loan disbursement refers to the process of providing the home loan amount to the borrower.
  • Banks 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, in cash or in your account
  • There are 5 home loan disbursement stages.The amount disburses in full or in stages depending upon the stage of completion of construction.
  • You can check the application for home loan disbursement, EMI instalments paid etc in your home loan statement.
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What is The Disbursement of Home Loan?

Home loan disbursement refers to the release of the credit amount by the bank or financial institution your account. The lender makes the home loan sanction and disbursement of the loan amount once all the legal formalities are done, documents submitted, and the down payments made. In addition, the home loan disbursement stages or home loan release stages is completed in full or in parts depending on the stage of construction of your house.

Key Stages under Home Loan Disbursement Process

The process followed under the home loan disbursement stages in banks are:

  • Documents Submission : First and foremost, you are required to submit a signed duplicate copy of the offer letter and you 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 : You will then be intimated regarding the date of the down payment and the required first instalment .
  • 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, the loan will be disbursed.

Documents Required for Home Loan Disbursement

You will have to submit the following documents for housing loan disbursement

  • Identity proof : PAN Card, Aadhaar Card, Passport, Driving License, etc
  • Address proof : Aadhaar Card, Passport, Driving License, Utility Bills, etc
  • Date of birth proof : Birth Certificate, 10thCertificate, Aadhaar Card, PAN Card, Passport, etc
  • Income proof : ITR’s, Bank statements, salary slips
  • Business proof : Profit and loss statement, Business license, balance sheet
  • Mortgaged property documents : NOC from a builder/society, Approved copy of building plan
  • Documents of the property to be mortgaged (such as approved copy of building plan, NOC from society/builder, estimated cost of house construction, etc.)

Home Loan Disbursement Process for Under Construction Property

The home loan disbursement process for under construction property is bit different:-

  • For under construction property, the loan amount is disbursed in stages.
  • Portion of loans is availed as and when the builder demands payment.
  • Some lenders charges EMI only on the disbursed amount, this way the EMI is lower.
  • In case of a smaller loan amount, the whole loan amount can be sanctioned.
  • You cannot avail tax benefits on under construction property.
  • Tax benefit can be availed if you pay 5 EMIs during construction.

Check Home Loan Disbursement with Top Banks

The home loan disbursement process varies across banks depending upon the requirement of the amount. Here is the 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 a down payment, you can make the request for home loan disbursement. The request for disbursement can be made either online or offline. For making the request offline, you are required to visit the branch office while you can visit the bank's official website and login the user ID and request for the online loan disbursement. Bank will either provide the loan in a single instalment or multiple instalments according to the terms and conditions 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:

  • You 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 a third party guarantee, has been taken for a short period.
  • The loan amount will be disbursed in a single instalment or multiple according to the terms and conditions of the particular home loans.

ICICI Bank Home Loan Disbursement

ICICI Home loan disbursement process is as follows:

  • 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 with all the documents provided, the home loan amount will be disbursed to the borrower.


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 disbursement of loan.

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 requirements and terms & 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 full home loan disbursement?

Full home loan disbursement is a process under which the home loan amount is disbursed in full to your account or given in cash.

What is partial home loan disbursement?

In the partial home loan disbursement process the home loan amount is disbursed as and when the builder requires the payment. Also, there are few lenders who charge EMI only on the disbursed amount, which keeps the EMI lower.

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