InvestorQ : How does a bank disburse a loan?
Ankit Patil made post

How does a bank disburse a loan?

Rohan Bhadani answered.
3 years ago

Disbursement of a loan is when a bank transfers the funds it has sanctioned to you directly in to your account.

A loan can either be disbursed as a lump sum or in installments, usually not exceeding three in number.

If you have taken a loan for an under-construction property, the disbursement is in installments based on how the construction is progressing. This is assessed by the lender and not necessarily according to the developer's agreement.

When you take a loan, do ensure that you enter an agreement with the developer wherein your payments towards the developer are linked to the construction work and not pre-defined on a time-based schedule.

If a bank is disbursing a loan for fully-constructed property, then the loan amount is disbursed entirely.