Loan Disbursement: Checkout Processing Time & Factors Affecting After Approval
  • Personal
  • Business
  • Corporate
  • Private Banking
  • Privy League
  • NRI Services
  • Investors
  • Personal
  • Business
  • Corporate
  • Private Banking
  • Privy League
  • NRI Services
  • Investors

Personal Loans are popular financial tools that provide quick access to funds for various urgent and planned needs. Whether you need funds for a medical emergency, foreign travel, study abroad programme, home renovation, or wedding planning, a Personal Loan provides instant funds through a 100% digital loan procedure. However, how does the disbursement process work once you get loan approval?

The loan disbursement process can be confusing, especially if you are unfamiliar with how it works. Below, we will discuss the process in detail and give an overview of the steps involved.

What is Loan Disbursement?

Loan disbursement, or loan disbursal, occurs when the lending institution transfers the approved loan amount to your bank account after they approve your loan application and you accept the loan offer. The loan providers check several factors before beginning the Personal Loan disbursement process, including verifying your details, evaluating your Personal Loan eligibility, scanning through your documents, assessing your credit history and repayment capacity, etc. Therefore, understanding the actual disbursal process is essential to avoid situations like loan rejection or loan sanctioned but not disbursed.

Factors Affecting Loan Disbursement Time After Approval

The loan disbursement time after approval may take anywhere from a few minutes to hours. The duration depends on the lender’s policy, technical implementation, loan type, and your Personal Loan eligibility. For instance, the process is faster if the lender supports a 100% digital procedure with no branch visits and paperwork. On the other hand, the process may take days if they call you to their office several times for applications, signatures, and other formalities.

Since Personal Loans at Kotak Mahindra Bank have 100% digital procedures, reviewing your loan application and granting approval takes only a few minutes. After approval, you receive a loan offer with details like the approved Personal Loan interest rates, loan amount, repayment tenure, processing charges, etc. Once you agree and accept the loan offer, the loan disbursement occurs almost instantly.

Steps Involved in the Personal Loan Disbursement Process

Understanding the loan disbursement process will give a clear idea of what and when to expect. With this knowledge, you can stay prepared for each step in the process. These are the steps involved:

1. Application

The loan process starts with the application. Once you select a loan plan you want to take advantage of, visit the lender’s website and fill out an online application form to apply for a loan. After selecting your loan amount and tenure using a Personal Loan EMI Calculator, upload the required docs to complete the application. The lender’s representative may contact you if they need more information or documents.

2. Approval

After you submit all the required Personal Loan documents and details, the lender takes an appropriate Personal Loan processing time to review your creditworthiness, employment stability, income regularity, and repayment capacity. If they are satisfied, they approve your loan application and send you an approval letter detailing your approved loan amount, interest rate, repayment tenure, and applicable Personal Loan fees & charges.

3. Signing the Agreement

Once the lender approves your loan application and you accept the loan offer, you must sign a loan agreement with the loan provider. The agreement contains all the loan-related terms and conditions, including the loan amount, repayment schedule, term maturity, interest rate, applicable fees and charges, consequences of default, etc. Carefully read each condition before signing to avoid any surprises or misunderstandings later.

4. Loan Disbursement

The loan company may carry out the Personal Loan disbursement process through any of the following methods:

  • Direct Deposit: The lender directly credits the approved loan amount into your bank account.
  • Cheque: The lender issues a cheque for the approved loan amount, which you can collect from their branch and deposit to your bank account.

Loan disbursement time after approval varies based on the lender and the verification requirements. In most cases, advanced financial institutions like Kotak Mahindra Bank disburse loans on the same day of approval. Others may take a few days or more. Once the lender completes the verification and documentation procedures and you proceed with the loan disbursement, you will receive the loan amount within the stipulated Personal Loan processing time.

5. Loan Utilisation

Personal Loans are unsecured loans with no usage restrictions. That means you can use the loan amount for any legal purpose, whether for a medical emergency, home renovation, foreign education, travel plan, or wedding-related expense. Once you receive the loan amount after disbursal, utilise it for your intended purpose and repay its cost in equated monthly instalments (EMIs).

6. Repayment

The repayment period starts immediately after completion of the Personal Loan disbursement process. You must have seen your repayment schedule when using a Personal Loan EMI calculator. The tenure begins on the same date of the next month after disbursal. Before applying for a loan, you must evaluate your finances and repayment capacity and choose a loan tenure with budget-friendly EMIs. Ensure paying your EMIs on time to build a strong credit history and repay your loan by the term-end without stressing your budget.

Key Takeaways

  • Your Personal Loan interest rates depend on your monthly income, repayment tenure, repayment capacity, credit history, and other crucial factors.
  • You may transfer your current loan from one lender to another if the repayment schedule does not suit your monthly budget.
  • Technology plays a crucial role in the Personal Loan disbursement process.
  • Through new-age banks like Kotak Mahindra Bank, you can avail of an instant Personal Loan online. You don't need to physically visit their branch or handle hefty paperwork, as the entire process is completed through their website or app.
  • Advanced lending institutions use AI and data analytics to check the details you entered in your loan application. Your past repayment record also matters as it indicates your possibility to repay the loan on time.
  • Once the lender feels confident of getting their loan amount, they disburse it to your account instantly. The process was much more troublesome and time-consuming in the old traditional methods.


The loan disbursement process involves multiple steps, from application and approval to disbursal and repayment. Once you receive approval, you can sign the loan agreement to receive funds directly to your bank account. Remember to pay the EMIs on time to avoid negative consequences and build a solid credit history. If you want to apply for a Personal Loan from Kotak Mahindra Bank, you can visit the website or loan app, fill out the application and submit it to get quick approval and instant disbursal.

Latest Comments

Leave a Comment

200 Characters

Read Next

Tips to Improve Your CIBIL Score


Debt-to-Income Ratio: Achieving Financial Balance with Personal Loan


The Evolution of Online Personal Loan Apps

Load More

Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.