Personal Loan Disbursement Process: Step-by-Step Guide

The personal loan disbursement process is an important aspect you must know when applying for a loan. This is because the disbursement process directly impacts the timeline of when you will get the funds. Additionally, this process varies for every financial institution and the time taken to complete the process also differs. 

To understand the personal loan disbursement meaning and process, read on. 

3 Stages of Personal Loan Disbursement Process

Simply put, personal loan disbursal is the time when the lender transfers the funds to your account. Generally, there are three stages in the disbursal process of a quick personal loan online, these are:

Application stage

To begin the personal loan disbursement process, you need to apply for a personal loan. Apart from filling in the application form, you will need to submit documents that the lender needs to verify your identity and creditworthiness.

These include:

• ID proof such as an Aadhaar or PAN card and an employee ID card
• Address proof such as driver’s licence, passport, etc.
• Bank statements of the last few months and/or income tax returns

Approval and processing stage

Once you submit your loan application, the lender authenticates the information. Most financial companies check your credit score, repayment history, as well as income and debt to ensure you can repay on time. If you meet all essential parameters, the lenders approve your application. You will receive the sanction or confirmation letter at this stage, which you need to sign and send back to the lender.

Also Read: How Does a Personal Loan Works

Disbursal stage

Once all these formalities are complete, personal disbursement of loan comes next. This is the time 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. Sometimes, you may have to wait 2-3 days after you sign the agreement to receive money in your account. In other cases, you may receive the funds on the same day.

Remember, the loan process doesn’t end with personal loan disbursal. The next stage is critical to your financial health. This is when you repay the loan amount in EMIs that contain both the principal and interest components. By ensuring timely repayments, you can maintain your creditworthiness for future requirements.

Speed Up Personal Loan Disbursement Process

Now that you have understood the stages of personal loan approval, knowing how to speed up the process is essential. 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 quick approval
• Keep all needed documents ready beforehand to speed up the application and approval process
• Ensure your documents are correct and have updated information to avoid resubmission
• Apply with the lender with whom you have a prior or existing relationship for quicker verification and approval

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 a few minutes. The Personal Loan disbursement process is instant and hassle-free on Fibe. Apply for a loan of up to ₹5 lakhs on our Personal Loan App or our website to enjoy seamless borrowing.

Repayment Process Following Personal Loan Disbursal

Following the personal loan disbursal process, all borrowers must follow the repayment method format. The loan repayment usually commences the month after the loan gets disbursed and is then managed via EMIs (Equated Monthly Installments), which consist of the interest features and principal. 

Borrowers need to make all such payments before the given due date to prevent fines and preserve an excellent credit score. You will find many repayment approaches, such as foreclosure and part-prepayment. 

Foreclosure involves paying the whole outstanding amount right before the loan term ends. On the other hand, part-prepayment lets all the borrowers pay off a certain fraction of the principal early. 

This lessens the interest liabilities in the future. It’s paramount for borrowers to remain well-informed about all their repayment plans and check out all the options, such as “auto-debit” for all timely payments.

FAQs on the Personal Loan Disbursement Process

How will I receive the personal loan amount?

The lender will transfer the sanctioned (approved) loan amount to your preferred bank account upon approval. You will receive a communication about the same.

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

Access to funds depends on the lender you choose. Generally, you will get the loan amount just a few hours after disbursal as the lenders transfer the amount online. Some lenders may take up to 2 days or more to disburse the amount after completing all the formalities. You can check the lender’s disbursement period of a lender on the official website.

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 up to 3 days. By choosing Fibe, you can enjoy a fast disbursement loan and receive the loan amount within a few minutes of approval.

Can a loan be cancelled after disbursement?

Disbursement means that the lender has credited the amount to your account and you can cancel your loan only before disbursement. Once you receive all the funds in your account, it is not possible to withdraw your application if you change your mind.

How to cancel a personal loan after disbursement?

Once the lender initiates the personal loan disbursement process, you can’t cancel it. This is because personal loan disbursement refers to crediting the loan amount to your bank account. 

Why is my disbursement taking so long?

There can be specific reasons for a delay in the disbursement of your sanctioned loan amount. For instance, there can be a mismatch between your bank account number and the one provided to the lender. In addition, some traditional lenders take as long as 10 days to credit your loan amount after initiating the disbursement. To know the exact reason for the delay, contact your lender.