Buying a home is one of the most crucial and landmark decisions you make in your lifetime. Everything about your home loan, right from the research, application, documents, and the lender you choose to go with, has to be perfect. Ample research and knowledge about the entire home loan process is the best way to avoid any surprises later.
Bookmark this post right away if you are still in the research stage and are looking for extensive know-how on the home loan disbursal process.
The disbursement of a home loan is a staged process and follows multiple steps that start from the application. Technically, it is the last stage of your home loan procedure wherein your lender hands you over the loan amount via cheque, demand draft, or a bank transfer. The home loan disbursal happens after the loan application is successfully screened and approved. Remember, your lender will only disburse the amount after a thorough technical evaluation of the property, documents, and down payment.
As such, the disbursement of the loan itself involves multiple steps. Therefore, by familiarizing yourself with the home loan disbursement process, you can avoid any hiccups later on. Sounds like a plan!
First, let’s quickly summarise the necessary processes that occur before your home loan disbursement stages kick in.
Stages Before Disbursement of Home Loan
There are two processes before disbursement of a loan – application, and sanction.
- Application: The home loan application stage is an initial stage where you fill out the lender’s home loan application form and submit it along with the required KYC and home loan documents. You must choose the lender carefully and wisely after comparing their brand reputation, interest rates, repayment terms, customer service and other factors. The home loan documents required to go with your home loan application vary based on the chosen lender. However, the standard documents required by everyone are KYC documents, bank statements, income tax returns, income proof documents, property documents, sale agreement, credit score, and more. The completeness and correctness of these documents are incredibly crucial to the outcome of your home loan application.
- Sanction: Next comes the process wherein your home loan application is screened, evaluated, and checked to assess your repayment capacity. Your lender will determine the merit of sanctioning you a home loan based on your income, creditworthiness, property and more. It involves careful, expert-led legal and technical evaluation of your property, repayment capability etc.
Thanks to digitisation, many of these processes, including loan onboarding, verification, assessment, etc., have become hassle-free, quick, and convenient. Once your lender is satisfied, you can rest easy and wait for your loan approval. Next, we move into the final stage of getting your hands on your loan amount: the home loan disbursement process.
Let’s learn about it in detail.
Must Read: How to Choose a Home Loan Lender
Disbursement of Home Loan – The Process
Give or take, there are usually three broad stages in the home loan disbursement process.
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- Request for Disbursement
Customers will have to place a request with the financial institution for loan disbursement. Simultaneously, you will have to arrange for documentation depending upon the type of property such as sale agreement, ownership chain for a property etc. There could be main 2 scenarios:
Direct Allotment from Developer: Here documentation includes the allotment letter, payment receipt, demand letter, post-dated cheques, etc.- Direct Allotment from Developer: Here documentation includes the allotment letter, payment receipt, demand letter, post-dated cheques, etc.
- Ready/Resale Property: If it’s a ready-property, or resale property, you will need an agreement to sell along with the complete chain of property documents.
Get in touch with our representative to learn more about the documents required for loan disbursal.
- Processing of The Loan Disbursement Amount
Once you have submitted the documents, the financial institution will conduct a legal and technical evaluation of the property. Depending upon the evaluation, the verification of the necessary documents, the deposit of the home loan processing fee, and the requisite signatures by all parties, the final loan amount will be processed and disbursed. - Final Disbursement of Loan
The lender will release you the sanctioned loan amount during the final disbursement stage. However, bear in mind that it could either be a total disbursement or a partial disbursement. That depends upon the actual stage of construction of your property. If it’s a total disbursement, your EMI payments will start from the next month of receiving it. However, you might have to pay a ‘pre-EMI’ interest in the event of a partial disbursement till you receive the entire amount.
- Request for Disbursement
Additional Read: Fixed vs Floating Rate of Interest – What Suits you The Best
Final Words
If guided well and executed based on the guidelines, the home loan application and disbursement process is smooth and easy. The real trick lies in researching and gathering adequate knowledge about the process, the required documents, and further steps. We encourage our valuable customers to use Ace – an innovative digital customer onboarding platform. This smart solution enables customers to log into the PNB housing portal where you can submit the loan application form digitally from the comfort of your home and upload the necessary documents.
We hope this write-up helped you gain a clear and detailed understanding of the home loan disbursal process and its nitty-gritty. The transparency in the application process followed by your chosen lender makes a huge difference.
Well, we hope that clears all your doubts regarding the home loan disbursement process and its various stages. However, remember that the steps can vary from lender to lender. With PNB Housing Finance, we ensure that the entire process is as transparent and worry-free for you as possible. Our customer-friendly features and doorstep services are always a nudge away to help you inch closer to your dream home from the comfort of your home.
