Here’s the Complete Disbursement Process of Personal Loans in India

Here’s the Complete Disbursement Process of Personal Loans in India

Be it meeting an emergency fund requirement or planning for a special occasion; in India, you can use a personal loan for a wide range of purposes. Lenders generally do not ask too many questions regarding the purpose of the loan. Personal loans in India require minimal documentation. The disbursement process is also swift.

For those who are planning on taking a personal loan, they should know about the unique loan disbursal process. Knowing the disbursal process makes it easier to apply for a personal loan in India and get it in time. In this blog, you can get an understanding of the entire disbursal process right from applying for the loan.

1. Applying for the Loan

The personal loan applying procedure in India is a simple process. It is the first step of the disbursal process. But before applying for the personal loan in India, determine your needs and the loan amount you require. Also, make sure that you are eligible for the loan. Along with a duly signed personal loan application form, you will also need to provide some documents. Although they vary from one lender to the other, the following documents are essential for availing a personal loan from almost every lender in India:

• An ID Proof
• An Address Proof
• Proof of Income
• Lender Statement
• Income Tax Returns (ITR)
• PAN Card
• Few passport size photographs

2. Loan Approval

After you have submitted your loan application along with all the required documents, the lender will initiate the approval process. These are where the lender will decide whether you can afford to pay your debts or will end up being a defaulter. The process needs some time; usually, it takes 2-3 working days, because the lender will go through all the provided documents and credit history thoroughly.

To make it easier for them to check all your documents, make sure that your documents are in order. Check all personal loan documents carefully and see if you provided all the required documents in the right order with the correct details as asked for by the lender. The process can be way faster if the lender already knows you. If possible, try to apply for the personal loan with the lender with whom you already have a savings or salary account. As the lender already knows about your financial creditability and also that you are one of their trusted customers, they probably will not let you wait much longer.

3. Loan Disbursal

Once your loan is approved, you will either receive a cheque with the sanctioned amount or the amount will be directly credited to your account. Along with the authorised amount, a sanction letter will be mailed to you which will include all the details related to the personal loan such as the loan amount, interest rate, loan tenure, EMI, etc. The disbursement process takes no more than 1-2 working days.

4. Confirmation by Lender

After disbursal of your loan, you will receive a confirmation letter via email or by post. Along with the confirmation letter, you may also receive a welcome kit which will contain all the information related to the personal loan.

5. Loan Repayment

Once you have received the loan amount, you have to start paying for the borrowed amount. The repayment process is monthly, that also includes the amount of interest. You can choose to pay your monthly installments with post-dated cheques or through Electronic Clearance Service (ECS).

If you take the loan from your existing lender, you choose the periodic auto-debit function with standing instructions for paying EMIs. You can apply for an Auto-Debit facility which will automatically deduct the monthly installment amount from your salary account and pay for the personal loan.


A personal loan can be your friend in difficult times, and hence you need to know the disbursal process. However, before taking a personal loan, you must always check the rate of interest, the required documents, and the EMI payments for the same. You must also realise that a personal loan in India may require some time for approval.