Overview

Loan disbursement refers to the process of transferring loan funds to the borrower after approval. Depending on the disbursement method selected during loan product creation or loan booking, the funds can be disbursed via different channels.


We support three disbursement methods:

  1. Wallet Disbursement

  2. Bank Disbursement

  3. Third-Party Disbursement


Each method determines how the loan amount is processed before reaching its final destination.


Disbursement Methods Explained

1. Wallet Disbursement

When a loan is set to disburse to a user's wallet, the funds are credited directly into the borrower's wallet. No additional transfers are needed.



2. Bank Disbursement

If the loan is set to be disbursed to a bank account, the funds first go into the borrower's wallet before being transferred to their bank account. This results in two transaction records:

  • One transaction for the loan amount being credited to the wallet.

  • Another transaction for the transfer from the wallet to the bank account.



3. Third-Party Disbursement

Similarly, for third-party disbursement, the loan amount first moves into the borrower's wallet before being sent to the intended recipient. This ensures that necessary deductions or additions are applied before final transfer.



Why does the loan first go to the wallet?

In cases where a loan has upfront payments, such as:

  • Upfront Interest Payment

  • Upfront Fees

  • Equity Contribution


The funds need to be adjusted before they are sent to the final recipient. This adjustment may involve deducting fees or adding extra funds, which is why the wallet is the initial point where the loan is deposited.


Key Takeaways

  • Loan disbursements follow different paths based on the method selected.

  • Wallet disbursement goes directly to the user's wallet.

  • Bank and third-party disbursements first go to the wallet before being transferred.

  • The wallet serves as an intermediary to ensure necessary deductions or additions are applied before the funds reach their final destination.

If you have further questions about loan disbursements, please contact our support team at support@lendsqr.com.