Home Loan Disbursement and Sanctioning Process

What is Home Loan Disbursement?

Before you apply for a Home Loan, you must understand how the disbursal process works so you know what to expect. Home Loan disbursement is the process through which the approved Home Loan amount is credited to your bank account. The Home Loan disbursement process relies on the terms and conditions of your chosen lender. The Home Loan disbursement process comprises 3 stages: form filling, document sanctioning, and finally, Home Loan disbursement.

Another important aspect of your Home Loan disbursal is getting your Home Loan sanction letter, as this alone holds all the information crucial to your Home Loan disbursal. Read on to understand this document better.

What is a Home Loan Sanction Letter?

A Home Loan sanction letter is a document offered by your lender approving your Home Loan application. It contains the details of the loan agreement, including:

• The Home Loan amount
• Applicable rate of interest – fixed or floating
• The rate of interest
• The repayment tenor of the Home Loan
• EMI amount
• The EMI repayment schedule
• Details of tax benefits
• Special subsidies/offers (if applicable)

The Home Loan sanction letter is proof that you are eligible for the Home Loan with the predetermined terms and conditions and should be kept safe through the repayment tenor and even after.

How does the Home Loan Sanction Process Work?

Once you submit your Home Loan application form along with the required documents, the Home Loan sanction process begins. The lender verifies your documents and evaluates your credit profile to assess your loan eligibility. If the lender is confident of your ability to repay the loan and your loan eligibility, a Home Loan sanction letter is issued to you. The Home Loan sanction letter acts as an evidence of your loan approval.

How is the Home Loan Amount Disbursed?

• The lender first evaluates your application and verifies the documents you submit. 
• The disbursement process of your Home Loan is detailed in your sanction letter – be it in one lump sum or parts.
• The disbursement is initiated by your lender, and the amount will reflect in your bank account within the stipulated period.
• Once the entire Home Loan amount is disbursed, expect to begin EMI payments a month after receiving the sanction am