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A Home Loan disbursement is the stage at which the lender approves and transfers the loan amount into the borrower's bank account. This is done in accordance with the financial institution’s terms and conditions.

Stages of Disbursement

The home loan disbursement process is divided into 3 major parts. These are:

1. Request for Disbursement

Once the loan has been sanctioned, you can raise a request to your lender for the loan’s disbursement. Meanwhile, arrange for documents as required depending on the type of property. These will depend on the type of property you wish to purchase.

  • Under-construction Property: In this case, documents like the allotment letter, demand letter, payment receipt, post-dated cheques, etc. are required

  • Ready/Resale Property: For a ready-to-move-in or resale property, you will be required to furnish a sales agreement and the complete ownership chain of property documents. 

 To know the exact list of documents required, contact your lender and seek their assistance.

2. Verification and Processing

Once you submit the documents, the lender conducts a technical and legal examination of the property. Simultaneously, your documents are also verified by the financial institution. Alongside this, depending on whether all requisite signatures of all parties and the processing fee of your home loan are submitted, the loan is processed. Once the evaluation is complete, the amount is ready to be disbursed.

3. Final Disbursement

In this stage, the lender will transfer the sanctioned loan amount to you. This could be in the form of either a full or a partial disbursement. The type of disbursement is determined on the basis of the stage of completion of your property’s construction. In case of a total disbursement, you will be required to start making your EMI payments from the next month of having received the loan amount.

 

Documents Required for Home loan Disbursement Process

Below is the list of documents required for a Home Loan disbursal.

  • Application form along with passport-size photographs

  • Identity Proof:

  1. Aadhaar card
  2. Passport
  3. Driving license
  4. Voter ID card
  • Residence Proof

  1. Voter ID card

  2. Passport

  3. Driving license

  4. Aadhaar card

  5. Utility bills

  • Income Proof:


For Salaried Applicants

  1. Last 3 months' salary slips

  2. Form 16

  3. Bank statements from the previous six months

  4. ITR of previous two years


For Self-employed Applicants

  1. ITR for the previous two years

  2. 6 months primary bank statement

  3. Copy of the firm’s service tax/GST/VAT returns (as applicable)

  4. Advance tax payment slips (if any)

  5. Balance sheet of previous six months

  6. Assessment copy of profit and loss

  • Other Documents

  1. Age proof

  2. Office address proof

  3. Investment details (if any)

  4. Co-applicant’s identity proof

  5. Co-applicant’s passport-size photographs

  6. Property documents

  7. Estimate cost of construction

  8. NOC from builder/society

  9. Approved copy of building plan

  10. Sanction letter

  11. Encumbrance certificate

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FAQs on Home Loan Disbursement Process

What is partial disbursement?

In partial disbursement, the loan amount is given in instalments to the borrower. It is mainly for an under-construction property. Under this payment method, the financial institution disburses the payment in accordance with the development of the building. 

How much time does it take to get the loan processed?

After the approval, it may take anywhere between 7 days and 4 weeks. The time duration varies across the lender. 

What are the eligibility criteria to get a Home Loan?

Your eligibility for acquiring a Home Loan is dependent on multiple factors like your age, income, employment type, credit score, financial habits, etc.

What are the documents required for Home Loan disbursement?

Below is the list of documents that you must have.

  • Identity proof

  • Residence proof

  • Age proof

  • Income proof

  • Property documents

Is the processing fee for a Home Loan refundable?

No, the processing charges are non-refundable.

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