Understanding Disbursement Process of Personal Loan

Published on: 10 May 2023

Be it for an occasion such as a wedding or a festive celebration or to upgrade your home, applying for a loan is a hassle-free method for supporting finances for them. 

A major advantage of such a loan is that you can access the loan amount faster than most other financing solutions. This is related to the personal loan disbursal process.

Read on to understand more and better about it.

What does the personal loan disbursement process entail?

There are 3 stages to the disbursal process of a quick personal loan online, as follows:

Application stage

Before the personal loan disbursement process can start, begin by applying for a personal loan. Apart from filling in the application form, will need to submit documents that the lender needs to verify your identity and creditworthiness.

These include:

• ID proof such as an Aadhaar card or PAN card and employee ID card
• Address proof such as driving license, passport
• Bank statement of the last few months and/or tax returns

Approval and processing stage

Once you submit your loan application, the lender authenticates the information. Most financial companies check your credit score and repayment history as well as income and debt to ensure you have the ability to repay on time. If it all checks out, the lenders approve your application. At this stage, you will receive the sanction letter or confirmation letter, which you need to sign and send back to the lender.

Disbursal stage

Once all these formalities are complete, personal loan disbursement comes next. This is when you will receive the loan amount directly in your bank account.

While some lenders take 3-4 days to review your application, others offer instant approval. The same applies to the gap between the sanction and disbursement. While you may have to wait for the money in your account for 2-3 days after you sign the agreement, in other cases you may receive the funds on the same day.

Keep in mind that the loan process doesn’t end with personal loan disbursal. The next stage is very important to your financial health. This is when you repay the loan amount in EMIs that contain both the principal and interest components. By ensuring that you repay on time, you can maintain financial fitness.

How to speed up personal loan disbursement?

There are many ways in which you can ensure the loan amount is disbursed quickly, such as:

• Apply online and only with lenders that have easy eligibility terms that you can match
• Choose a digital lender with AI and ML-enabled processes for faster verification
• Apply for a loan amount that you are eligible for to get quicker approval
• Keep all needed documents ready beforehand to speed up the approval process
• Ensure your documents are correct and have updated information to avoid resubmission
• Apply with the lender you have a prior or existing relationship with to hasten the process

Armed with this information about personal loan disbursement, you can now get ready to take a loan whenever you need funds. At Fibe, you can benefit from easy-to-meet eligibility terms and online approval in just 10 minutes. Apply for a loan up to ₹5 lacs on our Personal Loan App and enjoy fast disbursal.

FAQs on loan disbursement

How will I receive the personal loan amount?

You will get the personal loan amount in the bank account that you share with the financial company at the time you apply.

How long does it take to get a personal loan after disbursement?

Usually, you will get the loan amount in just a few hours after disbursal as the loan amount is transferred online. Some lenders may take up to 2 days to disburse the loan amount after all the formalities are done.

How much time does it take for loan disbursement after the sanction letter?

This depends on the lender. After you sign the sanction letter, you may receive the funds in a few hours or in up to 3 days in general.

Can a loan be canceled after disbursement?

No, disbursement means the amount is being credited to your account and you can only cancel your loan before disbursement. Once you receive all the funds in your account, it is not possible to withdraw your application if you change your mind.

What is the difference between loan sanction and disbursement?

Loan sanction refers to official approval from the lender that you are slated to receive the loan amount. Disbursement refers to the process of transfer of the loan amount from the lender to the borrower’s bank account.