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  • Personal Loan Disbursal Process

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  • Nowadays, personal loan is in great demand as it is a feasible way of financing a wide variety of needs; right from planning a holiday to renovating your home, personal loans are the best option to ensure cash flow at difficult times. A lot of lending organizations offer easy and affordable personal loan solutions to customers. However, there still remains a spiral of confusions when it comes to the disbursal process.

    Personal Loan Disbursal Time of Reputed Financial Lenders

    Bank/Lender Disbursal Time Processing Fee
    ICICI Bank Disbursal within 3 seconds from approval 2.25% of the loan amount + GST
    HDFC Bank 4 hours from approval of the application Rs.1,999
    Bajaj Finserv Within 24 hours from approval of the application 2% of the loan amount
    Standard Chartered Bank Within 72 hours from approval of the application 1% of the loan amount

    Processing of loan application

    Your loan application is processed within 24 hours to a week, depending on the credibility of information furnished by you. Once the loan is approved, banks generally provide a cheque that borrowers can collect from the branch, or sometimes it’s mailed to your address. The loan amount can also be credited to your bank account by the concerned branch through NEFT transfer.

    Disbursal of loan amount

    The actual amount of loan disbursed may differ from the amount sanctioned as per the agreement. The sanction letter is only an intimation from the lender that you are eligible for a particular loan, subject to certain conditions. However, the disbursal is based on additional formalities that you have to fulfil once the loan is sanctioned. The amount disbursed will depend of the following factors:

    • Type of loan
    • Processing fee
    • Upfront payments (if any)
    • Service tax

    Confirmation from the bank

    The bank will send you a confirmation letter after disbursal of the loan amount either as an email or as a paper copy along with a welcome kit. The bank will also provide you an EMI calendar and an amortization table that will help you calculate the principal to interest ratio for your loan payments.

    Key takeaways

    • While it may not be important that you update changes in employment, it is essential that you communicate the change in your bank account with the lender
    • You can transfer your loan from one lending organization to another at any point in time. But when you switch lenders, you will be charged a penalty
    • The rate of interest applied on your personal loan is based on your monthly income, credit score, and the duration of loan repayment

    Repayment process following personal loan disbursal

    Following the disbursal of the personal loan, the borrower will have to start the EMI payments the next month. For example, if the borrower has received the loan amount on the 4th of June, he/she will have to start the EMI payments in July as per the EMI payment cycle. In addition, in some cases, if the borrower receives the loan amount after the 20th of June, then the first EMI payment will be only in August.

    FAQs

    1. Certain financial lenders have instant personal loan disbursals, how can I apply and be eligible for these personal loan schemes?
    2. To be eligible for the instant personal loans, you have to have an existing relationship with the financial lender. Either have an existing loan (home loan, car loan, etc.) or a savings or current account and you should be on the list of pre-approved customers. Usually, with the instant personal loans, there is no need for submission of documents and verification.

    3. How can I reduce the EMIs to ensure I can repay the personal loan in a timely manner?
    4. You can reduce the EMI payments by making a down payment towards the personal loan. This will not only reduce the EMI payments, but will also you could get a better interest rate on the loan as well. In some case, the processing fee will be waived as well. In addition, you can reduce the EMI and the tenure of the loan by making part-payments towards the loan.

    5. What should I expect following the disbursal of the personal loan?
    6. Following the disbursal of the personal loan amount by the financial lender, you will receive an email and SMS confirming that the loan amount has been disbursed. You will also receive a welcome kit at your registered address. The welcome kit will contain the welcome letter, loan agreement papers, repayment schedule and amortisation table, and other possible goodies included by the financial lender for choosing to avail a personal loan from them.

    7. Can I cancel my personal loan after the money has been credited in my account?
    8. No, you cannot cancel your personal loan application after the money is deposited in your account. That said, you have time to cancel your personal loan application before the money is disbursed. You can cancel your personal loan application even after it has been approved by the financial lender. Usually, unless it is an instant personal loan, the customer care unit of the bank will call you prior to the disbursal of the loan. You can cancel your personal loan even at this point.

    9. How will I receive the personal loan amount?
    10. The most common way of receiving the personal loan amount is direct transfer from the bank to your bank account that you’ve mentioned in the application form. The direct transfer will be carried out by the bank via the NEFT facility. In addition, certain banks even disburse the personal loan amount via cheque or demand draft that has been addressed to the borrower. However, if you wish to receive the personal loan amount via cheque or demand draft, then you will have to collect it at the bank branch and deposit it in your home bank branch.

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