Getting your Home Loan approved or sanctioned is a moment of relief. It means the bank has reviewed your eligibility and approved your loan. However, the crucial part is that the journey begins with the disbursement process, when the funds are released to the builder or seller.
You still need to complete some final steps, including documentation, inspections and payment scheduling. Use a reliable Housing Loan calculator to plan your next move better and keep track of your financial commitments.
What does Home Loan final approval mean?
Final approval means your Home Loan is officially sanctioned, but the bank has not yet released the money. It confirms that the lender has verified your credit score, income documents and the property’s legal standing. At this point, you are eligible for the loan amount, but a few final checks are still pending.
Steps in the Home Loan disbursement process
Signing the loan agreement & completing formalities
Once you receive the sanction letter, you must sign the Home Loan agreement. This legal document confirms your acceptance of the terms and conditions. You must provide post-dated cheques or set up an e-mandate for EMIs. Additionally, you must submit the final set of property documents as requested by the bank.
Legal and technical verification of property
The bank will conduct another round of checks on the property. A legal expert re-checks the title documents to confirm there are no disputes. A technical officer may also inspect the property to verify that the construction and layout match the approved plans.
Submission of own contribution (down payment)
Before the bank releases any funds, you must deposit your share of the property cost. This is known as your down payment. The bank will ask for a payment receipt as proof. Disbursement will not proceed without this contribution from your end.
Disbursement request and schedule
You need to fill out a disbursement request form and submit it to the lender. For under-construction properties, the bank may disburse the loan in parts, based on the builder’s construction stages. For ready-to-move-in or resale properties, the bank usually disburses the full amount in one go. You can use a Housing Loan calculator to be aware of your payment and EMI schedule.
Types of Home Loan disbursements
- Full Disbursement: This is common for ready-to-move-in or resale properties. The bank releases the entire loan amount in one transaction after verifying all documents and the down payment.
- Part or Progressive Disbursement: This is used for properties that are under construction. The bank releases funds in instalments based on the construction progress.
Documents required before Home Loan disbursements
- Signed loan agreement
- All property documents, including the sale agreement
- No Objection Certificate(NOC) from the builder or society
- Proof of your down payment (bank receipt or transfer confirmation)
What happens after the Home Loan disbursement?
Once all documents are verified and your down payment is cleared, the bank transfers the loan amount directly to the builder or seller. Your EMI usually begins from the following month after the first disbursement. In case of part disbursement, you will need to pay Pre-EMI interest until the full amount is released.
Conclusion
Final approval is a major milestone, but it is not the end of the process. Home Loan disbursement involves multiple steps and requires clear communication with your lender. Make sure you provide complete documentation on time to avoid delays. Stay proactive and use digital tools like a Housing Loan calculator to stay financially prepared and ensure a smooth experience.
