Loan Disbursement

Overview

Loan Disbursement — Business Overview

Loan Disbursement is a core business document used to officially record and execute the release of approved loan funds to a borrower. It represents the moment when a loan moves from being approved to being financially active, and money is actually paid out according to agreed terms.

This document ensures that every loan payout is controlled, traceable, and aligned with internal policies and customer agreements.

Purpose in Business Operations

The Loan Disbursement document is used to: - Authorize and record the payment of loan amounts to customers - Track when, how, and to whom loan funds are released - Link financial payouts to approved loan agreements - Create a formal record for accounting, compliance, and audit purposes

In simple terms, it is the official confirmation that a loan has been paid out.

Prerequisites Before Using Loan Disbursement

Before creating a Loan Disbursement, the following business steps should already be completed:

A loan application has been reviewed and approved
Loan terms such as amount, interest, repayment schedule, and tenure are finalized
Customer identity and required documents are verified
Internal approvals and credit checks are completed
The business is ready to release funds (cash, bank transfer, or other payout method)

Without these prerequisites, a loan should not be disbursed.

Typical Business Workflow

Loan Approval
- The customer’s loan request is approved based on internal policies.
Preparation for Disbursement
- Loan amount, disbursement date, and payment method are confirmed.
- Any conditions (fees, deductions, partial releases) are reviewed.
Creation of Loan Disbursement
- The Loan Disbursement document is created to record the payout.
- It captures key details such as borrower, amount disbursed, and payment mode.
Fund Release
- Money is released to the customer or directly to a vendor (in case of purpose-based loans).
Post-Disbursement Tracking
- The loan becomes active for repayment tracking.
- Repayment schedules, interest calculations, and outstanding balances begin.

Key Business Scenarios Where Loan Disbursement Is Essential

Personal Loans
Recording direct payment to a customer’s bank account.
Business or SME Loans
Managing large disbursements, sometimes in stages.
Education or Asset Loans
Paying funds directly to institutions or suppliers instead of the borrower.
Partial or Tranche-Based Loans
Releasing funds in multiple stages based on milestones.
Audit and Compliance Reviews
Providing proof of when and how loan funds were released.

Important Considerations for Users

Accuracy is critical
Once a loan is disbursed, reversing it can be complex. Always verify amounts and recipient details.
Disbursement date matters
It impacts interest calculation, repayment start dates, and financial reporting.
Policy compliance
Ensure all internal approvals and conditions are met before disbursing funds.
Clear documentation
Proper records protect the business during audits, disputes, or customer inquiries.
Alignment with repayment schedules
Disbursement triggers the repayment lifecycle, so timing must be carefully planned.

Summary

Loan Disbursement is a vital business document that marks the official release of loan funds. It bridges the gap between loan approval and repayment, ensuring financial control, transparency, and compliance. Used correctly, it helps Dafater-based loan operations run smoothly, responsibly, and with full accountability.

Basic Information

Module: Loan Management
Document Type: Other

Fields

Field Name	Label	Type	Required	Options	Description
against_loan	Against Loan	Link	✓	Loan	Reference loan against which disbursement is processed in Dafater
sanctionedloanamount	Sanctioned Loan Amount	Currency		Company:company:default_currency	Total loan amount approved for the applicant
currentdisbursedamount	Current Disbursed Amount	Currency		Company:company:default_currency	Amount being disbursed in this transaction
posting_date	Posting Date	Date		-	Accounting date for recording disbursement in Dafater
applicant_type	Applicant Type	Select	✓	Employee, Member, Customer	Category of applicant receiving the loan
loan_product	Loan Product	Link		Loan Product	Loan product defining terms, rates, and rules
monthlyrepaymentamount	Monthly Repayment Amount	Currency		Company:company:default_currency	Expected monthly repayment amount for the loan
loan_partner	Loan Partner	Link		Loan Partner	External or internal partner associated with the loan
company	Company	Link	✓	Company	Company responsible for loan disbursement
applicant	Applicant	Dynamic Link	✓	applicant_type	Specific applicant receiving the loan amount
repaymentscheduletype	Repayment Schedule Type	Data		-	Type of schedule used for loan repayment calculation
repayment_frequency	Repayment Frequency	Select		Monthly, Daily, Weekly, Bi-Weekly, Quarterly, O...	Frequency at which loan repayments are due
repayment_method	Repayment Method	Select		, Repay Over Number of Periods, Repay Fixed Amo...	Method used to calculate repayment amounts
tenure	Tenure	Int		-	Total number of repayment periods
repaymentstartdate	Repayment Start Date	Date		-	Date when loan repayment begins
istermloan	Is Term Loan	Check		-	Indicates whether loan is a term loan
withholdsecuritydeposit	Withhold Security Deposit	Check		-	Indicates if security deposit is withheld from disbursement
disbursement_date	Disbursement Date	Date	✓	-	Actual date when loan amount is released
clearance_date	Clearance Date	Date		-	Date when disbursement amount is cleared
bpidifferencedate	BPI Difference Date	Date		-	Date used for broken period interest difference calculation
brokenperiodinterest_days	Broken Period Interest Days	Int		-	Number of days for broken period interest calculation
disbursed_amount	Disbursed Amount	Currency	✓	Company:company:default_currency	Actual amount disbursed to the applicant
brokenperiodinterest	Broken Period Interest	Currency		Company:company:default_currency	Interest charged for the broken period
bpiamountdifference	BPI Amount Difference	Currency		Company:company:default_currency	Difference arising from broken period interest adjustment
principalamountpaid	Principal Amount Paid	Currency		Company:company:default_currency	Principal amount already paid by the applicant
modeofpayment	Mode Of Payment	Link		Mode of Payment	Payment mode used for loan disbursement
disbursement_account	Disbursement Account	Link		Account	Account from which loan amount is disbursed
refund_account	Refund Account	Link		Account	Account used for processing excess or returned amounts
loan_account	Loan Account	Link		Account	Ledger account tracking loan principal
bank_account	Bank Account	Link		Bank Account	Bank account used for disbursement transaction
cost_center	Cost Center	Link		Cost Center	Cost center associated with the loan disbursement
loandisbursementcharges	Loan Disbursement Charges	Table		Loan Disbursement Charge	Charges applied during loan disbursement
reference_date	Reference Date	Date		-	Date referenced for calculations or reporting
dayspastdue	Days Past Due	Int		-	Number of days repayment is overdue
status	Status	Select		, Draft, Submitted, Cancelled, Closed	Current workflow status of the loan disbursement
reference_number	Reference Number	Data		-	External or internal reference identifier
amended_from	Amended From	Link		Loan Disbursement	Original loan disbursement document being amended

Child Tables