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Personal Loan Disbursal Process

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.

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

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