Everyone nurses the ambition of being a proud homeowner and applying for a home loan is one step closer to your dream, but before you apply for your home loan, you must understand how the disbursal system works, so you know what to expect. Home loan disbursement is the system by which a loan amount, approved by the lender, is moved from the lender to your bank account. How a home loan amount is disbursed relies on the conditions of the home loan. The home loan disbursement process comprises 3 stages which are: form filling, document sanctioning, and final home loan disbursement.  

The home loan disbursement process may look like a herculean task, but with proper information like this, you will be ready for the home loan disbursement flow. 

Concerning homes in the construction phase, the home loan reimbursement process here will occur in tiers. A new payment is made upon reaching a new stage of construction. You will also be required to pay a certain amount to help process your home loan application. This often heralds the home loan disbursement process and the home loan sanction process. How the home loan amount is disbursed is left to the lender to decide. Whether lump sum or parts, the decision is theirs to make. 

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This is how your home loan amount will be disbursed:

• Your lender determines how the home loan amount is disbursed, whether in a lump sum or tiers. This is often outlined in the home loan agreement. 
• For the home loan distribution process flow, the lender will dispense cash based on the level of construction done. When the entire home loan amount has been disbursed, expect to begin EMI payments the month after the one in which you received the loan amount. Again, this is stated in the home loan agreement. 
• For part-payments, the lender may want you to pay the “pre-EMI” interest till the home loan disbursement process is complete. The regular EMI payments follow. 

Read more to see what a home loan sanction letter is, the procedure after home loan sanction, and, the home loan sanction process. 

A home loan sanction letter is a document offered by your lender which declares that your home loan application has been approved. It comprises the details of the loan agreement and such details include: 

• The home loan amount
• The rate of interest
• The Base Rate for calculating interest
• The duration of the home loan
• How you will repay the loan
• Information regarding your EMIs
• Details of tax benefits

The procedure after home loan sanction is quite tiresome and it begins when you submit your home loan application form, completed with a list of the required documents. The lender starts the verification of the submitted documents and checks your credit score. Having a good credit score is an added advantage for loan applications. The home loan sanction process moves on when the lender is confident in your ability to repay the loan. They issue the home loan sanction letter which certifies your application as approved. If everything in your application is in place and satisfies the lender, you home loan amount can be disbursed in just 48* hours.